US probing whether airlines collude to keep airfares high

[WASHINGTON] The US Justice Department is investigating whether US airlines are working together to keep ticket prices high, spokeswoman Emily Pierce said on Wednesday.

News of the probe knocked down airlines shares in mid-afternoon trade with the Dow Jones US airlines index down nearly 4 per cent. Shares of United Continental, JetBlue, Delta Air Lines, Southwest Airlines, Alaska Air Group, Spirit Airlines all fell against the backdrop of a broader market that was up nearly a half per cent.

The Associated Press, which broke the story, said that the department was trying to determine whether the airlines were colluding to grow slowly in a bid to keep airfares high. "We are investigating possible unlawful coordination by some airlines," said Ms Pierce in an email.

A spokesman for United Continental Holdings Inc said the airline had received the letter and was complying with it. He declined to offer additional details.

The Justice Department, which investigates mergers to assess whether they violate antitrust law, has approved a string of airline mergers. Most recently, US Airways merged with American Airlines in 2013, United bought Continental in 2012, Southwest bought Airtran in 2011 and Delta purchased Northwest in 2008.

REUTERS