Lawsuit accuses Delta, AirTran of colluding on bag fees

A proposed class-action lawsuit claims that Air Tran Airways and Atlanta-based Delta Air Lines, Atlanta's two largest carriers, colluded to start charging customers a fee to check a first bag.

The suit, filed in U.S. District Court in Atlanta, claims AirTran invited Delta to collude on imposing a first bag fee by signaling that it wanted to start charging the fee if Delta acted first, and that Delta accepted the invitation.

Delta announced in November it would start charging a $15 fee to check a first bag, effective for travel Dec. 5 or later. AirTran announced a similar fee about a week later. Delta was not the first carrier to start charging a first checked bag fee.

AirTran spokesman Christopher White said AirTran "reached an independent conclusion on a decision to implement bag fees, just as we do with all pricing decisions."

"We compete vigorously with all the airlines," White said. "It's an extremely competitive environment."

Delta said it had not been served with the lawsuit and it was premature to comment until it had an opportunity to review the claim.

It's not unusual for airlines to match fares and fees, and the issue of price signaling is not new in the airline industry either. Airlines are often careful about making public statements on future pricing decisions on fares and fees, for example.

The lawsuit, filed by passengers Brent Avery and David Watson represented by attorney Cale Conley of Conley Griggs LLP in Atlanta, contends that competition between Delta and AirTran "prevented either airline from charging a first bag fee for fear of losing sales to the other."

AirTran chief executive Bob Fornaro in an Oct. 23, 2008, analyst conference call on the company's financial results stated that AirTran had elected not to start charging a first bag fee "primarily because our largest competitor in Atlanta" had not done it.

According to the lawsuit, the communication "was not normal marketplace guidance."

Delta announced its first checked bag fee a couple of weeks after the conference call, followed by AirTran's match.

The moves, the suit claims, constitute collusion in violation of the Sherman Act.

The class as proposed could include thousands of passengers, including those who paid Delta or AirTran first bag fees on domestic flights starting Dec. 5 "and continuing until the effects of Delta's and AirTran's anticompetitive conspiracy ceases," with some exclusions.

The process for the lawsuit, including a determination of whether it is certified as a class action, could take months.