A federal grand jury has been convened in Texas to investigate allegations that American Airlines may have used illegal tactics against Braniff International to help push its Dallas-based competitor into bankruptcy, sources said yesterday.
Grand jury subpoenas reportedly were served on officials of Braniff and American Airlines, Braniff's strongest competitor; other airlines operating at Dallas' major airport, and a number of lending institutions that carry some debt for Braniff and American.
Elliott M. Seiden, chief of the transportation section of the Justice Department's Antitrust Division, confirmed yesterday that there was a grand jury in Texas. However, he said that department policy prohibited him from confirming what companies were involved.
Others said the grand jury--meeting in Dallas and Fort Worth--would be focusing specifically on whether American might have engaged in unfair methods of competition against cash-short and debt-laden Braniff in an attempt to push it into bankruptcy.
One issue in the investigation is said to be whether American had attempted to monopolize service at Dallas/Fort Worth Regional Airport by duplicating Braniff's route system and schedule. DFW is the major hub now for Braniff and American, which more than doubled its service there last year.
The Antitrust Division was said to be particularly concerned about charges that American might have approached Braniff's lenders, urging them to tighten the conditions of Braniff's debt or to liquidate the airline before its low-fare policy, which American matched, hurt American.
Braniff, which lost $160.6 million last year, is negotiating with 39 lenders to restructure about $733 million of its debt. Last year, the lenders had agreed to put off interest and principal payments until Oct. 1, 1982.
Sam Coats, Braniff vice president, confirmed yesterday that Braniff Chairman Howard D. Putnam has been subpoenaed to testify before a grand jury in Fort Worth today. Coats also said that Braniff had not instigated the investigation.
In a statement, American said it would cooperate fully with the Justice Department and was sure the results would exonerate American.
"American has not engaged in any anticompetitive activities or dirty tricks, and we view this investigation as an opportunity to establish that once and for all."
American said it was "clear now that the baseless rumors and accusations about American" could be laid at Braniff's doorstep.
A month ago, the Civil Aeronautics Board confirmed that it was looking into charges that American might have engaged in a variety of "dirty tricks" in an attempt to create problems for Braniff, charges American President Robert L. Crandall called "absolute lies" and "fabrications."
These centered on the accusations about Braniff's lenders and other charges that American might have created a cash-flow crisis at Braniff by keeping up to $9 million worth of Braniff tickets and dumping them for collection all at once; that American representatives may have reserved seats on Braniff flights and canceled the reservations at the last minute; that American pilots might have engaged in delaying tactics on runways, and that it might have fomented talk within the travel industry of a Braniff bankruptcy so that agents would book on other airlines.
American said yesterday that it had been told informally by the CAB that its investigation revealed no evidence of improper activities.