The Justice Department yesterday filed a proposed consent decree to end its civil antitrust suit charging that American Airlines and its chairman, Robert L. Crandall, attempted to establish a monopoly at Dallas-Fort Worth Airport.
The proposed decree would enjoin American and Crandall from monopolistic activity and would require Crandall to keep extensive notes for two years on his contacts with other airline executives. The notes would be subject to Justice Department review.
Crandall was not available for comment. American issued a three-paragraph statement that said it had agreed to the decree and that the proposed settlement involves no admission of liability by either the airline or Crandall.
The proposal also contains a Justice Department statement of the circumstances under which it will permit airlines to discuss pricing with each other, primarily when they are setting so-called joint rates for trips involving more than one carrier.
The statement is potentially important for railroad, truck and bus companies as well, because it permits the kinds of necessary business discussions some transportation companies have argued would be illegal unless Congress confers antitrust immunity. That argument has been used particularly by some segments of the trucking industry to fight attempts at further deregulation.
Elliott M. Seiden, chief of the transportation section of Justice's antitrust division, said the proposed decree, while not intended as a broad statement of policy, has "the department putting its money where its mouth is on those kinds of issues."
Justice sought in its original complaint to enjoin American from discussing pricing with any other airline and to enjoin Crandall for two years from serving as a president, chief executive officer or in any other airline position having pricing responsibility or authority.
Seiden said the requirements levied on Crandall by the decree met Justice's goals. "The civil case wasn't brought to punish Mr. Crandall or American," he said. "We brought a civil case to enjoin the conduct and make sure it didn't happen again, and we think we've done that."
The Justice complaint was based largely on a tape recording of a telephone conversation in February 1982 between Crandall and Howard Putnam, then president of Braniff Airways. At that time -- before Braniff's bankruptcy and disappearance as a major carrier -- Braniff and American were locked in a fierce fare war for control of the lucrative and growing Dallas-Fort Worth market. The airline industry was in a deeper recession than the economy at large and both American and Braniff were losing huge sums of money.
Putnam taped the conversation. According to the Justice Department transcript, Crandall suggested that Putnam " . . . Raise your goddamn fares 20 percent. I'll raise mine the next morning."
Putnam: "Robert, we . . . "
Crandall: "You'll make more money and I will too."
Putnam: "We can't talk about pricing."
Crandall: "Oh expletive , Howard. We can talk about any goddamn thing we want to talk about."
The proposed decree prohibits American for five years from discussing passenger ticket pricing with other carriers, except to establish joint rates, develop tour packages, straighten out computerized fare listings, or for several other reasons.
Crandall would be banned for two years "from directly or indirectly discussing, referring to or mentioning fares or fare structures of any scheduled airline passenger carrier, including American, in a communication" with "any scheduled airline passenger carrier other than American."
Additionally, before he has any communication with another carrier "relating to any aspect of the airline industry," he has to review the subject matter with American's counsel. Then, within 48 hours of the communciation, he has to make a note detailing who talked and what was discussed.
Justice brought the complaint in February 1983, but it was dismissed the following September by U.S. District Judge Robert Hill. Justice appealed and the complaint was reinstated by the U.S. Court of Appeals in New Orleans.
The proposed settlement is subject to public comment for 60 days before final action by the U.S. District Court in Dallas.