5 Airlines Investigated For Post-Derailment Price-Gouging
SCOTT SIMON, HOST:
This is WEEKEND EDITION from NPR News, I'm Scott Simon. The U.S. Transportation Department has opened an investigation into five U.S. airlines for price gouging. Delta, American, United, Southwest and JetBlue are all being asked for information on pricing on flights between New York and Washington, D.C., before and after May 12, 2015. That's the day an Amtrak train derailed and crashed in Philadelphia, killing eight people. Investigators hope to determine whether those airlines raised ticket prices after the crash. That could violate federal regulations. Joining us now from New York is Scott Mayerowitz of the Associated Press. Thanks so much for being with us.
SCOTT MAYEROWITZ: Thanks for having me.
SIMON: And remind us what brought about this investigation.
MAYEROWITZ: This came about because one of the senators actually saw a airfare for $2,300 between New York and Washington right after the crash and believes that that was part of basic price gouging here. And you have to remember there are only so many ways you can get between the cities on the East Coast, and airlines control a portion of it and Amtrak controls a large share of it.
SIMON: Well, and that raised the argument at the time - isn't this just supply and demand? The number of seats along the Eastern Corridor go down; the price will go up.
MAYEROWITZ: If you look at any type of travel between New York, Boston and Washington at the last second on airline, it'll cost you a lot of money. I was looking at prices for those last minute walk-up fares and I've seen $400, $500, $600 out there. You know, the idea of a $2,300 airfare - that seems a little bit extreme, but it isn't uncommon at all to see something in the $700 or $800 range between those cities.
SIMON: My word, what kind of service for $2,300?
MAYEROWITZ: (Laughter) I don't even think you get peanuts for that price.
SIMON: Yeah, so there's specific flights they're taking a look at.
MAYEROWITZ: They're actually looking at all the flights between any airport along the Northeast Corridor. So everything from Washington all the way up to Boston, looking at Providence, Hartford, Baltimore and of course the bigger cities in between. And they just want to know what the prices were a few weeks before this crash and what the prices were after and how many seats on each of those planes were sold. I will point out, after this crash, several airlines did go ahead and actually add extra flights and larger planes. American and Delta, who operate the shuttles, were key in that. For instance, Delta went from a 76-seat jet to one that seats 110 passengers. It's not going to replace an entire Acela train, but it was a little bit that could help.
SIMON: Have the airlines made a response yet?
MAYEROWITZ: All the airlines said that they will be, you know, cooperating with the Department of Transportation in this investigation and that they stand behind their pricing and that they did not go ahead and gouge. Some of them, including Delta, said they actually went ahead and lowered fares. Delta capped its fares at $300 each way during this crisis period. They also honored Amtrak tickets for free and said go ahead, get on one of our planes. The big catch there is that there were very few seats available for people during this time.
SIMON: And there's another investigation of the airlines going on, too, isn't there, at the Justice Department?
MAYEROWITZ: Yeah, now, the Justice Department is taking a larger look at the airlines and basically saying, are you going ahead and reducing the number of seats on purpose in order to drive up fares? And are you communicating to each other how big of a cut you're going to have or how slow you're going to allow your fleet to grow? And that investigation was announced earlier on this month and is still pending as far as we know.
SIMON: Scott Mayerwitz of the Associated Press, thanks so much.
MAYEROWITZ: Thank you.
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