BUSINESS

Air Canada Named In 'Overpricing Conspiracy' Lawsuit

07/10/2015 09:12 EDT | Updated 07/10/2016 05:59 EDT
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A proposed class-action launched in Vancouver says airlines allegedly conspired to keep airfares artificially high.

The lawsuit alleges that Air Canada and several large U.S. airlines conspired to limit capacity on their routes, in order to inflate airline ticket prices.

In the federal court filing, which seeks approval for a class action lawsuit, Vancouver resident Richard Maynard names Air Canada, as well as Delta, American, United and Southwest airlines, and says: "the Defendants ... participated in a conspiracy with each other to: fix, maintain, increase or control the price for the supply of tickets for air travel in the USA or between the USA and Canada."

The lawsuit says the airlines "had communications about their plans for adding new flights, routes and extra seats," and "reached agreements to limit flying routes" and "passenger carrying capacity" in order to require customers "to pay illegal and artificially high prices for air travel."

The suit also says airlines "took steps to disguise meetings and communications in which they discussed the conspiracy."

Maynard's proposed class-action, if certified, would represent any Canadian who flew to or within the United States on the five major airlines listed in the past two years.

Maynard, a professional Vancouver riding instructor, travels extensively throughout North America for horse shows, coaching and purchasing horses.

He's bringing airline tickets he bought between 2010 and 2014 as evidence.

Similar U.S. civil anti-trust action

In a written statement to CBC, Air Canada says it is has not been advised of any legal proceedings and has no comment, but always complies with competition laws, whether in Canada, United States or elsewhere. None of the allegations has been proven in court.

The Canadian suit follows a similar U.S. civil anti-trust action launched last week. That suit alleges that Delta, American, United and Southwest airlines conspired to price fix by signalling to one another how quickly they would add new flights, routes, extra seats and by limiting access to competitive fare information.

The American anti-trust action alleges the airlines used a code word amongst themselves.

It says the word "discipline" was used as "a euphemism for limiting flights and seats, higher prices and fatter profit margins."

Earlier this year a U.S. Department of Justice investigation into possible unlawful co-ordination among U.S. airlines was launched.

"Last year airlines had ... record profits, so I think competition authorities both in Canada and the United 
States may be more keen to look into consumer complaints like this case, " University of British Columbia transportation professor Tae Oum told CBC News.

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