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Southwest to pay $15 million to settle collusion lawsuit

Southwest Airlines has agreed to pay $15 million to settle a class action lawsuit alleging that the largest four US carriers colluded on capacity plans.

The Dallas-based carrier will also provide "significant cooperation" to the plaintiffs in their claims against three other carriers American Airlines, Delta Air Lines and United Airlines, according to a court filing.

The class action suit, which was filed in 2015, accuses the four major US airlines of conspiring to fix prices through colluding on capacity plans.

Southwest says the $15 million settlement allows the airline to "forgo the considerable time, expense, and inconvenience that continued litigation would have involved".

"We have always vigorously denied any unlawful conduct or agreements with other airlines. That is still very much our position," says the Dallas-based carrier.

American and United say they plan to continue defending against the claims in the lawsuit, calling them "without merit".

Delta declines to comment on the litigation.

The four US carriers came under a separate probe over alleged collusion by the US Department of Justice in mid-2015, but the government did not take formal action against the carriers.

In addition to the $15 million settlement in the class action lawsuit, Southwest has agreed to provide further information to the plaintiffs and facilitate meetings between them and Southwest executives, according to court filings.

The settlement agreement, which is subject to court approval, was reached after three months of negotiations.

The $15 million settlement is part of $30 million in unplanned costs that Southwest is incurring in the fourth quarter of 2017. The additional costs contribute to $105 million in additional expenses that the carrier now expects to record in the period, which include employee bonuses following the tax reform bill passage.

Story updated with United's response

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