File US DoT/FTA complaints about US majors pricing collusion (if you value competition)

Discussion in 'Newsstand' started by redtailshark, Apr 7, 2016.  |  Print Topic

  1. redtailshark

    redtailshark Silver Member

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    Hello MP readers, as we know, the majors have implemented a new pricing method for multi-city itins.

    For those who haven't been following the AA/DL/UA boards, the summary is that multiple city itins are now subject to new conditions that prevent them being priced as the sum of one-way pricings (as they have been for decades previously). This change was a. not announced anywhere and b. occurred simultaneously across all three majors.

    This phenomenon has been reported on AA, DL and UA boards over at FT.

    DL: http://www.flyertalk.com/forum/delt...-comment-change-pricing-multi-city-trips.html

    Note the screenshots from a poster's Concur screen showing the warning about revisions to multi-city pricing and its economic impact on businesses.

    AA: http://www.flyertalk.com/forum/amer...going-aa-multi-city-high-pricing-tickets.html

    UA: http://www.flyertalk.com/forum/united-airlines-mileageplus/1754289-multi-city-pricing-issues.html

    The known facts indicate this action is potential collusion and that it warrants anti-trust investigation and perhaps, intervention.

    I am filing a formal complaint with the DoT, but also with FTC, on the grounds that this activity is clearly collusion for the purpose of market manipulation. I believe that it is collusion because a. the chronology and SIMULTANEITY across carriers who control > 80% of the US civil market suggests that this change has been illicitly coordinated and that b. the change has the effect of controlling the market and increasing prices irrationally for consumers.

    In case there are people who think, why can it matter? and can/will the regulators actually do anything? check what happened in the 1980s to Bob Crandall - former CEO of AA - who engaged in illegal conversations with his counterpart at Braniff regarding pricing. That case proves that the agencies CAN act against such market manipulation.

    http://www.nytimes.com/1983/02/24/business/american-airlines-target-of-us-suit.html

    Now, WILL they? Well...in your hands....

    One complaint won't do it, but many hundreds - or thousands - will have an effect. This is a serious matter.

    This really matters because the three US majors are now - in a tacitly coordinated way - probing the regulatory frontier with their collusion to manipulate market pricing. At this point. They need to be called out. Now. Otherwise, it will not stop.

    If you agree, draw attention to this posting including on FT - remember, I am censored over there, it is *mejor en su clase* indeed :)

    But even if you don't like my postings, you will see the danger this action presents to a competitive air transport market in the US. Act now if you value competition at all.
     
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  2. iolaire
    Original Member

    iolaire Gold Member

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    Has someone setup a web app to facilitate this? I probably will not file a complaint but support the effort and would consider it more if someone made it idiot proof.
     
    redtailshark likes this.
  3. redtailshark

    redtailshark Silver Member

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    I haven't set up a web app - beyond my tech scope.

    But over at FT, Joe Cortez has provided a commentary and included this open letter to DoJ Antitrust Division from the Business Travel Coalition. In this situation, the interests of consumers as a class are directly aligned with those of BTC. The key points raised by BTC (i.e. simultaneity; lack of disclosure; net impact on market) are very similar to the ones I stated above.

    http://www.businesstravelcoalition.com/press-room/2016/april-1---btc-letter-to-us.html

    This is a very clear case of collusive behavior intended to disadvantage all air travel consumers and it needs major pushback from every stakeholder group.
     
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  4. redtailshark

    redtailshark Silver Member

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    It seems that the airlines realize there's now serious heat on this issue and that these complaints will embarrass DoJ and other agencies by making them look institutional hypocrites. As a result, they may well receive some investigation action.

    There are reports of partial rollback of this new gouging pricing system by UA - again, without any announcement of anything at all by the airline.

    I'm astonished that there hasn't been more coordinated pushback over at FT on such a major market-manipulation issue by the cartel, rather than coincidental separate threads on the AA, DL and UA boards. The airlines have shown their hand now, and will continue testing regulatory thresholds regarding pricing mechanisms until there is major crackdown.

    It's not time to let up with complaints, quite the contrary, we need a real agency investigation involving subpoena of records of cross-company efforts to coordinate pricing/changes to systems that disadvantage consumers and involve cartel-level market control (>80% of US-market ASMs). The findings will be most welcome and instructive and hopefully, send a signal to airline execs about a. the vigilance of consumers as a class in spite of efforts to hide/minimize/obscure market pricing information and b. the consequences of flagrant violations of anti-trust laws.
     

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