Judge Tosses Suit Against American Airlines

April 27, 2001 -- A federal judge in Kansas today threw out a lawsuit brought by the U.S. Justice Department against American Airlines.

The closely watched lawsuit charged American with anti-competitive practices, including dramatically lowering air fares on some of its routes to try to drive low-cost competitors, including Vanguard Airlines, out of business.

U.S. District Judge J. Thomas Marten rejected the Justice Department's contention that American violated antitrust laws by flooding selected routes with low-costflights to drive out discounters.

"There is no doubt that American may be a difficult, vigorous, even brutal competitor. But here, it engaged only in bare, but not brass, knuckle competition," the judge said in his 142-page opinion.

The Justice Department had no comment other than a spokesman's comment of being "disappointed." She said department officials were reviewing their options, one of which is an appeal.

Trey Nicoud, associate general counsel for American Airlines, said the airline was pleased with the decision.

"We have been confident that we engaged in lawful competition," Nicoud said. "What American did was to meet their [referring to start-up airlines] competition and match their fares."

It was the first predatory pricing case the government had brought against an airline since deregulation more than 20 years ago, and was seen as a test case of government efforts to ensure airline competition.