Airlines Agree to Settlement in Price-Fix Suit : Transportation: Four carriers plan to issue coupons good for up to 20% off flights. But they will continue to use the computer system at the heart of the case.
Four major airlines on Monday agreed to pay more than $400 million in cash and ticket vouchers to settle charges that they had used reservations computers to fix prices.
Without admitting liability, Delta Air Lines, American Airlines, United Airlines and USAir will pay $44 million in cash and issue $368.5 million in vouchers to settle the price-fixing charges made in a 2-year-old class-action lawsuit. The settlement must still be approved by a federal judge in Atlanta, where the suit was filed.
The vouchers will be good on any of the four airlines for up to 10% off the price of most tickets, and 20% off round-trip tickets priced at less than $100.
How the vouchers will be issued and who qualifies to receive them have yet to be determined. The plaintiffs who brought the lawsuit estimated that as many as 12.5 million passengers were harmed.
Pitts Carr, a lawyer for the plaintiffs in the case, estimated that about a third of those eligible for the program are business travelers. He said ticket buyers “should receive significant economic benefits.”
Carr said virtually anyone who bought a ticket on the airlines for domestic travel between Jan. 1, 1988, and June 30, 1992 could be eligible for the program. “We’ve already heard from thousands, but we haven’t publicized it that widely. We expect millions will participate.”
The money being put up by the airlines likely would be used to cover the administrative expenses of handing out the ticket coupons, said one airline executive familiar with the deal.
Last year, Northwest and Trans World Airlines agreed to pay a total of $37.5 million to settle charges stemming from the suit.
The lawsuit alleged that the airlines controlled fares through the Airline Tariff Publishing Co., a computerized clearinghouse for ticket prices jointly owned by the carriers. The airlines used a code to signal whether fares were going up or down, and to discipline airlines that failed to conform, the lawsuit charged.
Airlines denied that they were fixing prices, saying the computerized system of listing prices is a good deal for consumers because it enables them to quickly find the best price on the routes they want to fly. The airlines will continue to use this system.
The suit initially was brought by about 50 individuals but was expanded to class-action status last year by District Judge Marvin Shoob in Atlanta. At the time, the airlines said the suit covered about 50 million customers, making it one of the biggest class-action cases ever.
