Airline Stocks Plummet Amid Department Of Justice Investigation

Shares of airline stocks were selling off Wednesday afternoon on higher than normal volume following reports that the Department of Justice is beginning an investigation into collusion. The Associated Press obtained a document that indicates the Justice Department is investigating if airlines are colluding with each other to grow at a slower rate in a combined effort to maintain high airfare prices. ABC News is confirming that the department is investigating "unlawful coordination" among each other. A spokesperson for the department declined to comment further, including which airlines is subject to the investigation. As of 2:31 p.m. ET, shares of Southwest Airlines Co LUV were trading lower by nearly 5 percent. A similar move was seen in shares of Delta Air Lines, Inc. DAL, American Airlines Group Inc AAL, Virgin America Inc VA and JetBlue Airways Corporation JBLU. Travel Pulse noted on June 22 that U.S. Senator Richard Blumenthal (D-Conn) asked the department to immediately investigate collusion and anti-competitive behavior in the industry. The Senator was quoted as saying in a letter to Assistant Attorney General William Baer: "The structure of the airline industry is already conducive to coordinated behavior … the legacy airlines closely watch the pricing moves of their competitors. When one airline ‘leads' a price increase, other airlines frequently respond by following with price increases of their own." The Senator also added that the Department of Justice itself may be part of the problem "by approving several mergers" which resulted in consumers paying "sky-high fares as airlines engage in market conduct designed to keep capacity artificially low."