US plans new airline controls

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The Independent Online
NEW YORK - US airlines would have to change their domestic pricing practices under a plan American regulators are trying to impose on the industry, writes Larry Black.

America's eight largest airlines have been offered a chance to settle monopolies charges brought against the industry last week by the US Justice Department, which alleges that the carriers fix prices through their jointly owned computer network.

While fare wars have been a fixture of the US travel market for a decade, the regulators say the airlines have used their database to warn one another of intended discounts and of likely retaliatory measures by rivals. In many cases, advertised fare cuts were offered for only a day, apparently as a means of forcing a price-cutter to abandon its discount, the Justice Department said.

US airline spokesmen confirmed yesterday that the regulators had proposed to drop the charges in exchange for an agreement from the industry to adopt new price-publishing procedures. The new rules, according to one report, would bar the airlines from giving long advance notice of planned fare increases, and from announcing the intended duration of lower-priced ticket sales.

The airlines would also have to stop using the system to signal the intended target of retaliatory price cuts, as the Justice Department accuses them of doing currently.

The eight airlines charged last Thursday were American, United, Delta, Northwest, Continental, USAir, TWA and Alaska Airlines.