US antitrust law, specifically the Sherman Antitrust Act, bars large dominant companies in an industry from using predatory pricing or capacity dumping to put a competitor out of business. The Cartel-Six Families airlines operate as a cartel precisely to protect each others' bloated cost structures, and don't take kindly to carriers like AirTran spoiling their fare-gouging fun.
So, for instance, it is legit for Delta to *match* AirTran's capacity on ATL-CAK, which they just decided to do, and to match AirTran's fares. But it is not legit for Delta to flood the market with more capacity and then undercut AirTran's fares. Despite the well-known complexity of airline pricing, predatory pricing (or the lack thereof) can be demonstrated; the lack thereof was demonstrated in the DOJ vs. AMR case.
And event though Delta's move might pass the legal test, it fails the smell test miserably. Delta can't possibly make money flying MD-80's to CAK. The move is purely predatory, and glaringly so.
Up until the last few years, the Six Families and their predecessors pretty much pulled whatever s**t they felt like on low-fare airlines and got away with it. However, a new day is dawning...consumers are furious about fare gouging, and so are their Congressmen and Senators. The very fact that DOJ prosecuted the American case at DFW was a major achievement. To say nothing of a conservative AG like John Ashcroft properly enforcing antitrust law and killing the anticonsumer UA-US supermerger.
The Six Families are desperate due to the loss of the business market's 1995-2000 willingness to tolerate their obscene $500-2500 fares. They need every last dollar they can extort out of defenseless medium and small size cities, so they're turning nasty.
However, if AirTran, JetBLue, or Frontier were to really suffer financial reverses due to predatory moves by the Mafia, there would be a swarm of furious Congresspeople and Senators demanding that DOJ act. Their constituents like low fares, and aren't going to take the Mafia's thug tactics lying down.
So far the Cartel competitive responses of summer 2001 have all been capacity matching, but as I sad that's really dumping since they can't make money matching AirTran or JetBlue's fares. Fortunately, the current crop of low-fare carriers has good management and a great product, as you observed Jaws. I think they're here for the long haul.
Need a new airline paint scheme? Better call Saul! (Bass that is)