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WORLD ARROW TOURISM ENTERPRISES v. TWA

March 22, 1984

WORLD ARROW TOURISM ENTERPRISES, LTD., Plaintiff, against TRANS WORLD AIRLINES, INC., Defendant.


The opinion of the court was delivered by: SPRIZZO

OPINION AND ORDER

SPRIZZO, D.J.:

 Plaintiff, World Arrow Tourism Enterprises, Ltd. ("World Arrow"), commenced this action against defendant, Trans World Airlines, Inc. ("TWA"), alleging antitrust violations under sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2 (1982). *fn1" Defendant has moved, pursuant to Fed. R. Civ. Pro. 12(b)(6), to dismiss plaintiff's amended complaint for failure to state a claim. *fn2"

 FACTS

 The allegations of the amended complaint, which are presumed to be true for purposes of this motion, *fn3" state the following. Plaintiff, a New York corporation with its principal place of business in New York, is a travel wholesaler and travel agent engaged in the business of marketing flights to travel agents and the public. Defendant, a Delaware corporation with a place of business in New York, is a domestic air carrier. Plaintiff's business includes the packaging, production, and operation of air charter programs to Italy from the United States. Some of defendant's flights operate between points in the United States and points in Italy.

 In October 1978, plaintiff and defendant entered into a contract under which TWA agreed to provide air transportation for round-trip charter flights departing from New York City, New York to Rome, Italy, commencing June 2, 1979 and weekly thereafter for a total of thirteen round-trip charter flights at a price of $72,312.14 per flight. Thereafter, plaintiff filed the proposed contract between itself and prospective charter passengers with the Civil Aeronautics Board ("CAB"). As required by CAB regulations, that agreement provided that a charter participant had the right to cancel his reservation and receive a full refund from plaintiff were the charter price to be increased.

 In March 1979, defendant filed two notices of price increase with the CAB. One increased the price of TWA's transatlantic charter flights and was to take effect June 5, 1979; the other increased the price of TWA's regularly scheduled transatlantic flights and was to take effect May 1, 1979. *fn4"

 In April 1979, defendant notified plaintiff that the price of the contracted charter flights to Rome that departed on or after June 1, 1979 would be increased by five per cent. At that time, charter flight tickets had already been purchased by plaintiff's customers. At about the same time, defendant decided that the seven per cent price increase for its regularly scheduled flights to Rome departing on or after June 1, 1979 would not apply to tickets purchased prior to June 1, 1979. Because of defendant's acts, plaintiff cancelled its charger agreement with defendant and abandoned its 1979 charter program to Italy. *fn5"

 Plaintiff claims that defendant violated the antitrust laws by retroactively applying a price increase that affected plaintiff's customers while pursuing a fare protection policy with respect to its own passengers.

 In support of its claim under section 1 of the Sherman Act, plaintiff further asserts that defendant adopted a "predatory pricing policy" and acted in concert with "various favored travel agents of the defendant" in promoting the sale of tickets on TWA's regularly scheduled flights to Italy in a manner intended to divert plaintiff's customers to TWA and to eliminate plaintiff as a competitor. See Amended Complaint paras. 17-25. The complaint also alleges that the travel agents were competitors of plaintiff and "actively participated in, aided and abetted the promotion of the predatory price policies of the defendant." *fn6" Id. para. 18.

 In support of its claim under section 2 of the Sherman Act, plaintiff alleges simply that "defendant, together with two other air carriers dominate the market for air transportation between points in the United States and Italy[,]" id. para. 22, and that the acts of defendant and the travel agents "tended to unlawfully maintain and increase defendant's monopolistic power," id. para. 25.

 For these alleged violations, plaintiff seeks treble damages, plus interest, costs and disbursements, and attorney's fees.

 DISCUSSION

 Section 1 ...


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