American, Piedmont Airlines Target of Antitrust Probe

The Justice Department is investigating the possibility that American Airlines and Piedmont Airlines carved up the highly profitable Dallas-Fort Worth passenger market in violation of antitrust laws, spokesmen for both airlines confirmed Friday.

The spokesmen said the federal inquiry has been under way for more than a year and that both airlines were cooperating with Justice Department investigators. Both of them said their airlines were innocent of any wrongdoing.

A Justice Department spokesman, Amy Brown, said two airlines were being investigated in the Dallas-Fort Worth area but declined to identify them.

“I can confirm that this department is looking into market-allocation agreements” that the two airlines might have entered into secretly, she said.

Such agreements, which are anti-competitive, would have one airline agreeing to stay out of routes served by the other, and vice versa. Such behavior would violate the Sherman Antitrust Act and would constitute a civil violation punishable by a fine.

Brown said she didn’t know how much longer the investigation would take. She said it was being conducted by three department lawyers, as well as paralegals. They are inspecting documents from both carriers, she said, and interviewing people at both airlines who may have been involved.

She said that charges involving an agreement to allocate markets have never been brought against an airline, though there have been cases in other industries, such as construction.

Piedmont began serving the Dallas-Fort Worth market in April, 1979, and operates nine flights a day between Texas and its hubs in Dayton, Ohio, and Charlotte, N.C.

Donald F. McGuire, vice president for public affairs, said: “We are convinced there was no wrongdoing on our part.” He said that Peidmont’s services into Dallas “fit handsomely into Piedmont’s route structure.”

Al Becker, a spokesman for American, said that “there has been absolutely no impropriety between American and Piedmont.”

American Airlines is by far the largest carrier in the Dallas-Forth Worth market. It operates 280 flights into Dallas-Fort Worth and the same number of flights out.

In December, American boarded 836,849 passengers there. Its market share at the airport grew to 60.4% in December from 55.4% in August.

Delta is the next-largest carrier in the market with 23.1% in December, up from 22.4% in August.

A handful of major carriers share the remaining segment of the market. They include Continental, United, Northwest, Eastern, Republic, Pan American, USAir, Western and TWA.

Braniff ceased to be a factor in the market in November when it cut its service from more than 20 markets to nine.