Feds probe airlines for price-gouging

WASHINGTON – 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 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. 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.

“The idea that any business would seek to take advantage of stranded rail passengers in the wake of such a tragic event is unacceptable,” Foxx said.

The department is exploring whether the price hikes violated federal regulations prohibiting airlines from engaging in unfair and deceptive practices. 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. Christopher Murphy, D-Conn., who complained to the Obama administration that some airlines had increased fares to as high as $2,300 following the train crash.

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

“I was glad to see that after their $2,300 flight raised eyebrows, Delta Air Lines announced that it would make every effort to accommodate passengers affected by the service outage along Amtrak’s lines in the Northeast,” he said. On Friday, Delta was charging $428 for a same-day, one-way fare from LaGuardia to Reagan National.

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. The airline also said in a statement that 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. The airline said it honored existing Amtrak tickets for travel between Washington, Boston and New York, waived change fees for travel on Delta Shuttle flights between those markets, and increased seat capacity in the region by adding flights and operating larger aircraft.

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