Air Transport World

Hard target.

In its first predatory pricing complaint against an airline since deregulation, the Justice Dept. has a lot to prove

Bad cases make bad law. The US Department of Justice seemingly has forgotten that old law school cliche in its haste to jump on the antiairline bandwagon that's been rolling through the halls of government ever since the industry starting making money four years ago.

In choosing Vanguard Airlines as the primary victim of predation and American Airlines as the predator, DOJ has dealt itself a tough hand with which to win a high-stakes gamble. Vanguard, after all, until recently has been regarded as the poster child for poor management, an airline more likely to self-destruct than be destroyed. Furthermore, DOJ will have to persuade a jury that simply matching a competitors' prices can be anticompetitive.

And claiming--as DOJ does--that American enjoys a monopoly position in Dallas conveniently ignores the fact that it currently faces new-entrant and low-fare competition including one-stop service on all of the top 30 routes from the Dallas/Fort Worth Metroplex, and direct nonstop competition from other Major and low-fare airlines on 27 of the 30. Furthermore, Vanguard is serving DFW from Kansas City today despite allegedly having been chased from the route by American in 1995.

Add to this the fact that when it comes to predatory pricing cases, US courts have stacked the deck heavily in favor of the defense. …

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