A federal grand jury yesterday indicted Braniff Airways, Inc., and Texas International Airlines, Inc., on charges of conspiring to monopolize air service among three major Texas cities.
The indictment, filed in U.S. District Court is San Antonio, charged the two airlines with engaging in illegal actions designed to keep Southwest Airlines from offering air service among Dallas-Fort Worth, Houseton and San Antonio.
Southwest is a successful intrastate airline which flies between a number of Texas cities at fares substantially below those of its federally regulated competitors.
The indictment charged that, as a result of the alleged antitrust violations, Southwest's entry as a competitor in the Texas area was delayed, its business relationships were injured, and the public was denied the benefits of free competition.
If the airlines convicted, the maximum penalty would be a $50,000 fine for each because the alleged violations took place prior to enactment of a law substantially raising the penalties for antitrust law violations.
Yesterday's indictment is based on the same facts and patterns of conducts alleged in an earlier grand jury indictment returned Feb. 14, 1975, but dimsissed by the District Court last Feb. 22.
In dismissing the earlier indictment, Judge Adrian A. Spears said a number of irregularities in the way evidence was presented to the grand jury invalidated the indictment. He also said that the former Civil Aeronautics Board offical who sat in on the grand jury proceedings as an "observer" but who was not assisting with the presentation of the case was an "unauthorized person" in the grand jury room6, which also vitiated the indictment.
The new indictment charged that prior to May 1971 until at least 1973, Braniff and Texas International conspired to impair the ability of Southwest to begin and maintain operations as an air carrier. They did this by allegedly coordinating their responses to Southwest's planned entry, exchanging information on such things as prospective schedules and fares, seeking to impair Southwest's operations at Houston's Hobby Airport, and undertaking to prevent 4Texas passengers from travelling on Southwest flights when Braniff or TI flights were cancelled.
They also were charged with engaging in a pattern of petitions to state and federal agencies and courts "with the predatory purpose of harassing, injuring or destroying Southwest."
Southwest began operations in Texas in June 1971 after nearly four years of administrative and judicial proceedings, and so far has remained Texas-only carrier although it has filed applications with the Civil Aeronautics Board to begin some interstate operations.