The government is after these five airlines for potential price-gouging

25 Jul 2015 | Author: | No comments yet »

Did Five Major Airlines Price-Gouge Stranded Travelers After the Amtrak Train Crash?.

Transportation Secretary Anthony Foxx said Friday the government has opened a price-gouging investigation involving five airlines that allegedly raised airfares in the Northeast after a deadly Amtrak crash in Philadelphia in May disrupted rail service. The derailment of an Amtrak train in Philadelphia two months ago caused immense tragedy and chaos: Eight passengers were killed, hundreds more were injured, and major service disruptions were incurred on the Northeast Corridor, a popular rail line that runs from Washington, D.C. to cities including New York and Boston. The Transportation Department sent letters on Friday to Delta, American, United, Southwest and JetBlue airlines seeking information on their prices before and after the May 12 train crash.

Among the routes the department asked airlines for price information on were flights to certain Northeast destinations from Dulles International Airport and Reagan National Airport near Washington; Baltimore-Washington International Airport; Philadelphia International Airport; three New York area airports —Newark, John F. The department is exploring whether the price hikes violated federal regulations prohibiting airlines from engaging in unfair and deceptive practices. Now the U.S. government is reportedly investigating allegations of price gouging at five major airlines that may have capitalized on the Amtrak crash by raising plane ticket prices for desperate travelers. Kennedy and LaGuardia; Logan International Airport in Boston; MacArthur Airport-Long Island in New York; Green Airport in Rhode Island and Bradley International Airport in Connecticut. It demanded an explanation for price increases, if any, and asked the airlines whether they communicated with each other about those fares, which might signal collusion.

The review involves Delta Air Lines Inc, American Airlines Group Inc, United Continental Holdings Inc , Southwest Airlines Co and JetBlue Airways Corp , all of which said they were cooperating with the probe. The letters to airlines explain that generally a practice is “unfair” if it “causes or is likely to cause substantial injury to consumers,” cannot be reasonably avoided by consumers and “is not outweighed by countervailing benefits to consumer or competition.” The investigation was prompted in part by a May 19 letter from Sen. The probe comes at a difficult time for U.S. airlines, already the subject of a Justice Department investigation into whether they worked together illegally to keep fares high by signaling plans to limit flights. Consumers are also showing signs of dissatisfaction after carriers recently squeezed more seats onto planes and added new ancillary fees, increasing the cost of air travel.

Delta said in a statement that it lowered its highest shuttle prices after the train crash “by nearly 50 percent, to about $300 each way,” for travel between New York, Boston and Washington. Separately, the Justice Department announced earlier this month that it is investigating possible collusion among major airlines nationwide to limit available seats, which keeps airfares high. For reasons still unknown, the train accelerated to 106 miles per hour in the minute before it entered a curve where the speed limit is 50, investigators have said previously.

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