Lawsuit sees collusion behind bag fee


People who shelled out $15 to check a first bag with two major airlines may see some relief.

The relief could come in a potential class action lawsuit that has been filed in U.S. court against Delta Airlines and the parent company of AirTran Airways by a Beverly Hills, Calif., woman who accuses the airlines of colluding to charge fliers a $15 first-bag checked fee.

The lawsuit says AirTran Holdings, parent of AirTran Airways, is incorporated in Nevada.

The lawsuit, filed in U.S. District Court in Nevada by attorneys for Delta passenger Victoria Mertes, accuses the two carriers and AirTran's parent company, AirTran Holdings, of colluding and violating the Sherman Antitrust Act.

The complaint claims the two airlines engaged in such fierce competition in some markets that neither could risk implementing the fees on its own.

The allegations of collusion hinge mostly on an Oct. 23 analyst call involving AirTran's CEO and President Robert Fornaro, in which the CEO said AirTan's "largest competitor in Atlanta" -- Delta -- had not then imposed such a fee. Fornaro added that in implementing baggage fees "(AirTran) would prefer to be a follower in a situation rather than a leader right now."

Delta "promptly accepted AirTran's invitation to collude" and announced a $15 first-bag checked bag fee on Nov. 3, the lawsuit alleges. On Nov. 6, AirTran followed with its own statement announcing it would follow Delta's lead by charging a first-bag checked fee.

The Nevada lawsuit claims AirTran's CEO knew Delta officials would be listening to the analyst call and used the call as an opportunity to invite its competitor to start charging the fee.

The complaint seeks damages in the form of cash back on behalf of all Delta and AirTran passengers "who directly paid the first bag fees." That would make for thousands of plaintiffs, the lawsuit alleged. But plaintiffs attorneys said only the airlines would have an accurate count of how many people would qualify to be part of the lawsuit.

Delta and Northwest, combined, now operate about 37 daily departures from McCarran International Airport.

Atlanta-based Delta merged with Northwest Airlines in April 2008, but Northwest already had a first-bag checked fee in place when the merger was announced. At that time, Delta responded to a question by saying it had "no plans" to follow Northwest's lead in implementing a first bag fee, according to the lawsuit.

Delta declined to discuss Mertes' lawsuit, which also contends Delta made $160 million on baggage fees in the first three months of this year.

"We don't comment on pending litigation," said Trebor Banstetter, a Delta spokesman.

An AirTran representative did not return a call for comment on the lawsuit by late Monday.

Most airlines implemented baggage fees last year in response to higher jet fuel costs.

The lawsuits' allegations of collusion based only on the analyst's call with the AirTran's CEO would be tough to prove, said Pat Lundvall, a local antitrust attorney who is not involved in the case.

"If they were answering a stock analyst's questions by giving a full and accurate answer, I don't think that is collusion," said Lundvall, a partner with McDonald Carano Wilson.

Contact reporter Valerie Miller at vmiller@lvbusinesspress.com or 702-387-5286.

 

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