American Airlines yesterday denied allegations by a high Braniff International official that American's top officials directed a campaign of illegal tactics against Braniff to help push it into bankruptcy.
American said the accusations, made by Sam Coats, Braniff's senior vice president for marketing, were "blatantly irresponsible and without foundation.
"It is unfortunate, although perhaps predictable, that Mr. Coats feels the need to shift responsibiity for Braniff's failure," American said.
Coats charged on Sunday that a campaign of dirty tricks against Braniff was directed from the office of American's President Robert Crandall. He also said it included the use of American's sophisticated computer reservations system--SABRE--to cancel Braniff reservations and switch passengers to American's competing flights. Coats said he had received calls from passengers who said they were originally booked on Braniff flights but were called by American's agents who said the Braniff flights were no longer available and booked them on American flights instead.
"I think if American Airlines' rank-and-file employes will come forward, we will eventually find that American Airlines' senior people set out to destroy Braniff with the travel agent community and with the public--and they did a good job of it," Coats said.
Similar allegations have been made before, and they currently are being investigated by a federal grand jury in Texas, but Coats' comments were the first made by an executive of Braniff, which filed last Thursday for reorganization under federal bankruptcy laws.
The grand jury is known to be looking into whether American might have engaged in unfair methods of competition against cash-short and debt-ridden Braniff in an attempt to push it over the edge. One focus of the investigation is said to be whether American had attempted, through predatory or unfair behavior, to monopolize service at Dallas/Fort Worth Regional Airport, the major hub for both Dallas-based carriers. American's push to concentrate a large portion of its service at DFW began a year ago.
Theoretically, if American or its officials were indicted, a criminal trial would be held seeking to determine whether American contributed in a material way to Braniff's demise, according to one antitrust lawyer. If found guilty of criminal violations in such cases, a company can be fined up to $1 million and its officials can be fined up to $100,000 and sent to jail.
The stakes then increase, and the injured company can sue for treble damages under the antitrust laws. In the case of a company like Braniff, the bankruptcy court inherits that cause of action, as an asset, and may pursue it. On Sunday, Coats said a successful lawsuit could bring Braniff at least $900 million.
The allegations against American include charges that its officials might have approached Braniff's lenders to urge them to tighten up on the conditions of Braniff's debt or to liquidate the airline; that it might have created a severe cash-flow crisis at Braniff by keeping Braniff tickets and dumping them for collection all at once; that American people may have reserved seats on Braniff flights and canceled them at the last minute; that American pilots might have engaged in delaying tactics on the runway; and that it might have fomented talk within the travel industry of a Braniff bankruptcy so that agents would book on other airlines.