In re Delta/Airtran Baggage Fee Antitrust Litig., MDL 2089 (N.D. Ga.)
McCulley McCluer serves as interim Co-Lead counsel in this antitrust class action against Delta Airlines and AirTran Airways seeking overcharges for first bag fees charged by defendants.
The Plaintiffs allege that Delta and AirTran colluded through communications with each other, for example, on quarterly earnings calls and in speeches and other communications at industry conferences. Beginning in April 2008, Defendants allegedly signaled to each other a willingness to collude in order to decrease capacity and increase prices to consumers without losing market share. Both airlines reduced capacity after April 2008, and in October 2008, AirTran allegedly invited Delta to collude to impose first checked bag fees.
Specifically, AirTran’s CEO stated on an investor conference call that AirTran had put the technological capability in place to implement the fee, that it was constrained from implementing the fee by competition with Delta, and that AirTran would likely follow suit if Delta enacted a first bag fee:
We have the programming in place to initiate a first bag fee. And at this point, we have elected not to do it, primarily because our largest competitor in Atlanta [i.e., Delta], where we have 60% of our flights, hasn't done it. . . . I think we prefer to be a follower in a situation rather than a leader right now.
Robert Fornaro, AirTran Investor Call (Oct. 23, 2008).
Delta, which monitors AirTran’s quarterly calls, announced just over a week later, on November 5, 2008, that it would begin charging passengers a $15 first bag fee, which Plaintiffs allege was an acceptance of AirTran’s invitation to collude. As promised in the conference call, AirTran followed Delta’s lead, and announced the following week that it would impose the same $15 fee, effective the same date as Delta’s fee.
On August 2, 2010, the District Court denied Defendants’ motion to dismiss Plaintiffs’ price-fixing claims. A copy of the decision is available HERE.
On February 3, 2012, the District Court ordered that sanctions be imposed against Delta for its discovery misconduct and awarded Plaintiffs certain fees and expenses relating to Delta’s failure to timely locate and produce documents. A copy of the Order is available HERE.