Government investigates 5 airlines for possible price-gouging

WASHINGTON — Transp­ortation Secretary Anthony Foxx said Friday that 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 Transportation Dep­art­ment sent letters 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 sought price information on were flights to certain Northeast destinations from airports in or near Washington, Phila­delphia, New York, Boston, Rhode Island and Conn­ecticut.

The department is exploring whether the price increases violated federal regulations prohibiting airlines from engaging in unfair and deceptive practices.

The investigation was prompted in part by a May 19 letter from Sen. Christopher Murphy, D-Conn., who complained to the Obama administration that some airlines had increased fares to as high as $2,300 after the train crash.

However, he also noted that some airlines “self-corrected after I initially expressed concern.”

Delta spokesman Trebor Banstetter said the airline didn’t raise fares after the train crash and that the $2,300 fare was in existence before May 12. Delta also said it lowered its highest shuttle prices after the crash “by nearly 50 percent, to about $300 each way,” for travel between New York, Boston and Washington.

American said it added capacity and that its fare structure remained the same after the crash. United, JetBlue and Southwest said they are cooperating with the investigation.

Amtrak services between Phila­delphia and New York were shut down for five days after the accident.

That affected passengers traveling through that region. For example, passengers couldn’t travel from Washington to Boston or New York, or from Boston to Philadelphia or Baltimore. Full service resumed on May 18.

Amtrak service accounted for 78 percent of the air-rail market between New York and Washington and 69 percent between New York and Boston last year, according to the railroad.

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. The civil antitrust investigation by the Justice Department appears to focus on whether airlines illegally signaled to each other how quickly they would add new flights, routes and extra seats. American, Delta, Southwest and United — the nation’s four largest airlines — have acknowledged receiving letters from the Justice Department related to that investigation.

Eight people were killed and about 200 were injured in the Amtrak crash in Philadelphia, temporarily disrupting service.

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. In the last few seconds the brakes were applied with maximum force, but the train was still traveling at over 100 mph when it left the tracks.

 

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Sun, 10/22/2017 - 17:59

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