It wasn’t price gouging, it was “surge pricing” insist the airlines.
Five airlines are being investigated by the federal government over allegations they raised airfares in the Northeast as desperate travelers flocked their way after the deadly May 12 Amtrak crash in Philadelphia.
Travelers reported airfares as high as $2,300 between New York and DC following the May 12 Amtrak crash that left the busy rail corridor paralyzed for a week prompting an investigation by the Department of Transportation.
That $2,300 ticket is more than five times what that same flight costs on average, even if booked at the last minute.
United Airlines CEO Jeff Smisek spoke at a May 19 Senate hearing claiming travelers faced last-minute airfares, which are generally higher than flights booked in advance.
“We would never take advantage of an opportunity like that, if you viewed it as an opportunity,” Smisek said.
But Sen. Chris Murphy (D-CT) disagreed and demanded a DOT investigation after reports of airfare spikes following the crash.
Last week the DOT sent letters to Delta, American, United, Southwest and JetBlue asking each to detail average fares along the route before, during, and afterthe crash.
The letter demanded an explanation for price increases and asked the airlines whether they communicated with each other about those fares, which might signal collusion.
Paul Hudson, president of FlyersRights said, “Hotels can’t charge $500 for a $100 room or gas stations $40 for a gallon of gas after a natural or man-made disaster. State laws prohibit such price gouging – some with criminal penalties.”
“We would never take advantage of an opportunity like that, if you viewed it as an opportunity,” said Jeff Smisek CEO of United Airlines
“Only airlines are exempt from all state laws with the federal DOT as sole regulator. DOT Secretary Foxx should order refunds and fines. This outrageous conduct also merits Congressional action to prohibit future airline price gouging.” Hudson said.
This is the second government investigation into airline price collusion within a month.
In early July the Justice Department alleged
Southwest Airlines, American Airlines, Delta Air Lines and United Airlines were engaged in price-fixing and colluding to restrain seat capacity to push airfares higher.
We Have Regulation In This Country Because Of Abuse Like This
Agree with them or not, there are price gouging laws in this country that attempt to prevent profit from crisis situations. Airlines need to follow the law, just like every other company.
As FlyersRights pointed out
recently, we’re fast approaching a tipping point with regards to air travel. It’ll end with either new regulations for US airlines on how their operations are conducted, or it will end with consumer rebellion.
The bottom line is these airlines saw an opportunity to make huge amounts of money off the Amtrak crash and they took advantage of it. Whether or not they’ll get charged remains to be seen.
Add to these investigations the continuing assessment of “fuel” surcharges
, despite the cost of fuel being at the lowest price its been in over a decade. Charging passengers this fee is a travesty and represents price gouging as well.
It is time that the Federal Trade Commission’s Bureau of Consumer Protection, or even the Interstate Commerce Commission, take action if the Department of Transportation won’t.