U.S. Probes Airline Database-Aided Price-Fixing
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NEW YORK — The federal government has begun investigating possible price-fixing in the airline industry, it was reported today.
The investigation focuses on the possibility that airlines are using a computer database to communicate pricing intentions to each other, the Wall Street Journal said.
The network of more than 100,000 published prices, operated by Airline Tariff Publishing of Washington, makes it easier for airlines to enter the data in their computer reservations systems for travel agents.
But former and current airline pricing officials told the newspaper that fare changes and computer coding sometimes contain signals to other carriers.
The newspaper said it has found evidence of such computer “conversations” by arranging to tap into ATP’s database.
Industry insiders said the main messages between the carriers, although not stated so explicitly, read as follows: “Let me determine the prices at my hub airport and I’ll let you do the same at yours.”
Donald Garvett, a former vice president of revenue management at Pan American World Airways, said, “It’s almost like electronic negotiation.”
“I wouldn’t like to suggest that anyone is doing anything illegal. It’s normal procedure to defend your turf,” he said.
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