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25 ATTORNEYS GENERAL OBJECT TO AIRLINE PRICE-FIXING SETTLEMENT

 25 ATTORNEYS GENERAL OBJECT TO AIRLINE PRICE-FIXING SETTLEMENT
 HARRISBURG, Sept. 23 /PRNewswire/ -- Attorney General Ernie Preate Jr. today joined the attorneys general of 23 other states and the Virgin Islands in attacking a proposed settlement of an airline price-fixing case which calls for consumer victims to get only hard-to-redeem coupons, while the class-action lawyers get at least $24 million in cash.
 "The proposed settlement is a bad deal for the flying public," Preate said. "The only real winners are the lawyers who are supposed to be representing the public's interests."
 The proposed settlement, which is subject to approval by the U.S. District Court in Atlanta, stems from several lawsuits filed after the U.S. Justice Department announced in 1991 that it was investigating alleged airline price-fixing.
 The settlement calls for discount coupons to be distributed to consumers who, between Jan. 1, 1988, and June 30, 1992, bought at least one ticket on the airlines for a domestic flight from, to, or through at least one of the 34 major U.S. airports, including Philadelphia and Pittsburgh.
 Preate said the attorneys general object to the following restrictions placed on use of the coupons:
 -- The coupons generally are good for no more than a 10 percent discount on future ticket purchases and can't be used in connection with already reduced fares.
 -- The coupons can't be used for travel during certain "black-out" periods around the Thanksgiving, Christmas and New Year's holidays.
 -- Consumers can't use the coupons for tickets purchased through a travel agent.
 The restriction on using the coupons in peak travel periods, the attorneys generals say, "is akin to giving discount coupons to parents for purchases of toys that are redeemable at anytime except the child's birthday, Christmas or Hanukkah."
 The ban on travel agents "appears to make no sense," the attorneys general charge, except that it saves the airlines money.
 Preate explained: "By cutting out the 10 percent commission they normally pay travel agents on ticket purchases, the airlines are recovering the entire 10 percent discount offered through the coupons.
 "In effect, the airlines lose nothing by giving out the coupons, and ultimately stand to gain through increased ticket sales generated by the coupons.
 "In addition, by eliminating travel agents from the booking process, the airlines take away the consumer's ability to get quick information on the most convenient and least expensive travel arrangements."
 The objections filed by the attorneys general note that several of the airlines recently ran newspaper ads offering discounts of even more than 10 percent.
 That, the attorneys general charge, suggests that the 10 percent "settlement" offer is nothing more than "a promotion masquerading as a settlement."
 Preate added: "It's questionable whether the paperwork the consumer must complete to obtain a coupon is worth the ultimate discount. On a round-trip fare of $250, for instance, the consumer saves $25. Airlines offer better deals than that every day."
 Preate said the only cash changing hands in the case is $50 million the airlines are paying out -- at least $24 million to the plaintiffs' lawyers and the rest in administrative fees.
 "Unlike the consumers they claim to represent, the lawyers made sure they get paid in cash, not coupons," Preate said. "And I believe the $24 million payoff to the lawyers is entirely disproportionate to the total recovery."
 Preate said he agrees entirely with Washington, D.C., Legal Times editor Terence Moran, who in a column last month blasted the proposed settlement as "...little more than a scam perpetrated on airline passengers by an unholy alliance of plaintiffs lawyers and the major airlines they're supposedly suing." "Passengers get a pittance. The lawyers, naturally, go home happy."
 In their objections, the attorneys general say that the fees for the plaintiffs' attorneys should not be decided until after consumers cash in their coupons and the actual value of the settlement is determined.
 The objections, which were filed today in U.S. District Court in Atlanta by Florida Attorney General Bob Butterworth, urge the court to refuse to approve the settlement in its current form.
 Joining in the objections were 23 other states and the Virgin Islands. The states include Maryland, New Jersey, New York, Ohio, Pennsylvania and Texas.
 In addition, Oregon earlier filed its own objections to the settlement on similar grounds.
 U.S. District Court Judge Marvin Shoob in Atlanta is to hold a hearing on the proposed settlement next month.
 /delval/
 -0- 9/23/92
 /CONTACT: Jack J. Lewis, assistant press secretary of the Office of Attorney General, 717-787-5211, or at home, 717-657-9840/ CO: Pennsylvania Attorney General's Office ST: Pennsylvania IN: AIR SU:


MK -- PH036 -- 2733 09/23/92 15:02 EDT
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Date:Sep 23, 1992
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