|Domination of Dallas|
|Topic||Market Failure, Regulation, and Public Choice|
|Key Words||Predatory conduct, monopolistic, fares, losses, competition, anti-competitive|
In April 2001, a federal judge threw out a Justice Department lawsuit against American Airlines that had alleged that American had used "predatory and monopolistic" conduct against Vanguard Airlines, SunJet International, and Western Pacific, forcing them out of Dallas/Fort Worth, American's biggest hub. The Justice Department charged that American had slashed fares and incurred losses to thwart competition, and then had raised fares again after forcing some of its competitors out. Only Western Pacific is now flying.
The government was concerned because it saw competition in the airline industry as being dependent on small start-ups and not on the actions of the major airlines.
American had claimed that it had engaged in vigorous but traditional competition, but had not broken the law. The district judge agreed, stating, "American may be a difficult, vigorous, even brutal competitor. But here it engaged only in bare-, but not brass-, knuckle competition".
Now the government has decided to appeal the case. If granted, the appeal would help define what is illegal, anti-competitive, conduct. American is confident that the appeals court will concur with the lower court.
(Updated August 1, 2001)
|Source||Marilyn Adams, "Airline antitrust case resurfaces," USA Today, June 27, 2001.|
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