Reno Air files suit against Northwest

Thursday, April 17, 1997 | 11:59 a.m.

Reno Air has filed suit in Federal District Court in Reno accusing a competitor of predatory pricing in response to the Nevada carrier's entry into the Minneapolis market.

Steve Sarner, vice president of marketing and sales for Reno Air, said the suit seeks ongoing damages from Northwest Airlines since Reno Air's entry into the market in April 1993.

The suit says Northwest violated antitrust laws when it retaliated against Reno Air when it competed with Northwest in its corporate backyard.

The suit, Sarner said, accuses Northwest of overlaying Reno Air's routes from Reno to Minneapolis, Seattle, Los Angeles and San Diego with cheaper fares after Reno Air began direct flights between Reno and Minneapolis, Northwest's corporate headquarters.

At the time, Reno Air was less than a year old. Reno Air discontinued the Minneapolis route on June 4, 1993.

"We contend that Northwest Airlines used its much larger size to foreclose competition and maintain expensive air fares," said Bob Rowen, vice president and general counsel of the airline.

"When Reno Air announced new, affordable service from the Twin Cities, Northwest overlapped Reno Air's service and engaged in a variety of tactics, including below-cost pricing, to drive us from the market.

"These actions were predatory and we're confident they violated the antitrust laws."

Rowen said the court will have to determine whether Northwest's tactics were exclusionary or predatory. Rowen said it should be several months before the court hears the case.

A Northwest spokesperson called the suit "absolutely ridiculous."

"It was a simple matter of competition," said Marta Laughlin. "We were the chosen carrier by more customers."

The airline also denies that it priced tickets below market rates.