A federal lawsuit filed Monday in San Francisco on behalf of a number of travel agents alleges the nation's three largest airlines' enacted new rules to block their least expensive prices from being used on many connecting and multi-city trips, a "conspiracy" to raise fares in violation of antitrust laws.

The complaint named as defendants American Airlines Group Inc., Delta Air Lines Inc., United Continental Holdings Inc., and Airline Tariff Publishing Co., which collects and distributes airline fare data world-wide and is partly owned by the three U.S. carriers.

Before the new policies, reservations computers would find the lowest price for each one-way flight in an itinerary and add them up to one price for the trip. But now the least expensive fares can't be combined and travelers need to purchase each flight separately to get the lowest prices on trips with multiple stops.

In recent weeks, Delta initiated the change and American and United quickly matched.

The new rules have raised the prices on multi-city trips, and, according to the suit, the airlines have put travel agents on notice that they could be required to pay the airlines the differences between the lower one-way tickets and the new higher prices.

According to the lawsuit, the airlines "have the ability, are likely and have threatened to penalize plaintiffs, including by terminating their ability to book flights and purchase tickets as travel agents, and by imposing substantial penalties on them if the plaintiffs do not abide by the policies and rules set by" the airlines.

American Airlines, the No. 1 U.S. airline by traffic, said the claims made in the complaint are "completely without merit," and said it will "vigorously" defend itself. American said it changed its rules to ensure that "new lower fares we introduced would be available to passengers flying the route for which the fares were intended." The move "eliminated a loophole in the fare rules that allowed some people to construct connections that combined two nonstop fares," the company said.

No. 3 United said it strongly disagrees with the contention that its recent fare changes are a result of illegal coordination. "United makes changes to its prices or fare rules unilaterally, to ensure its competitiveness…" the company said. "We will vigorously defend against this lawsuit."

Delta, the second-largest U.S. carrier, said it declined to comment on pending litigation.

A spokeswoman for Airline Tariff Publishing said the company is aware of the allegations made in the lawsuit, called them "meritless" and said it will defend itself vigorously.

Airlines have been putting a lot of deeply discounted fares into markets to counter growing ultra-discounters such as Spirit Airlines Inc. and Frontier Airlines Inc. This has set up some mini-fare wars in major cities as the players offer big savings to fill seats.

The complaint was brought by Alioto Law Firm in San Francisco, a specialist in prosecuting private plaintiffs' antitrust actions and one with a long history of suing the airline and travel industry. The lawsuit seeks to enjoin the defendants from engaging in alleged restraint of interstate trade and from penalizing travel agent plaintiffs.

Write to Susan Carey at susan.carey@wsj.com

 

(END) Dow Jones Newswires

April 19, 2016 16:15 ET (20:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Spirit Airlines (NYSE:SAVE)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Spirit Airlines Charts.
Spirit Airlines (NYSE:SAVE)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Spirit Airlines Charts.