United States Court of Appeals for the Tenth Circuit
335 F.3d 1109 (2003)
Dallas Fort Worth International Airport (DFW) was an airport hub. American Airlines, Inc. (American) (defendant) served 70.2 percent of DFW passengers. American competed with a small number of low-cost carriers at DFW. The low-cost carriers accounted for about 2 percent of DFW passengers. To compete with these low-cost carriers, American temporarily lowered prices and increased flight capacities. After these competitive changes drove low-cost carriers from DFW, American returned its prices and flight capacities to approximately the same levels that existed prior to the competition with low-cost carriers. The United States (plaintiff) sued American, alleging that American attempted to monopolize and did monopolize the DFW market in violation of § 2 of the Sherman Act. The United States argued that American intended to develop a reputation for predatory pricing that would deter low-cost carriers from entering the DFW market. To demonstrate predatory pricing, the United States used four tests for showing that the lowered prices and increased flight capacities created a net economic loss for American. However, American argued that it did not price below cost using an average variable cost measure. The district court agreed with American and granted American’s motion for summary judgment.
Rule of Law
Holding and Reasoning (Lucero , J.)
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