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AMR to face Justice probe?
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April 13, 1999: 7:27 a.m. ET
Report: Dallas airline faces antitrust suit after complaint from tiny rival
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LONDON (CNNfn) - American Airlines faces a U.S. Justice Department probe into allegations that it tried to drive a small rival from its giant Dallas hub, according to a report published Tuesday.
American would be the first victim of twin investigations by the Justice and Transportation departments into monopoly tactics against the shrinking band of low-cost start-up carriers, said The Wall Street Journal.
The charges against American have been leveled by Kansas City-based Vanguard Airlines, whose 11 aircraft are dwarfed by the 600 in American's fleet.
The Justice Department is reacting to claims that American dumped capacity and slashed fares to drive Vanguard away after the tiny carrier launched services from Dallas in 1996, said the Journal report.
The newspaper said antitrust chief Joel Klein had yet to decide whether to prosecute an airline case, although he said in congressional testimony he was investigating whether carriers "employed predatory strategies to protect their hubs".
U.S. regulators have focused on tactics in the airline industry after another wave of consolidation over the last year has seen the majors swallow up smaller competitors and contemplate more mega-deals.
American is taking over San Jose-based Reno Air to boost its California presence and Delta Air Lines (DAL) purchased its east coast affiliate, Atlantic Southeast Airlines (ASA) in February.
Regulators have already sought to block deals involving United Airlines (UAL) and Northwest Airlines (NWAC). America West (AWA) recently rebuffed overtures from United.
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