American Airlines, Travelport and Sabre are all claiming vindication in a federal court’s decision to dismiss all but one count of American Airlines’ antitrust case against Travelport. Sabre said that it still would like to negotiate a new distribution agreement with American. The court also dismissed all antitrust claims against Orbitz Worldwide.
In a decision issued earlier this week, the United States District Court for the Northern District of Texas dismissed AA’s claims that Travelport monopolizes distribution to travel agencies, that Travelport entered into a conspiracy with travel agencies to monopolize distribution, that Travelport’s agreements with airlines and travel agencies unlawfully restrain trade, and that Travelport’s actions are illegal under Texas state law.
The one claim the court allowed to proceed for further factual analysis was the claim that Travelport monopolizes access to its current travel agency subscriber base. Monopolization claims based on such narrowly defined markets rarely succeed, Travelport said in a statement, and a similar claim brought against a competitor was recently rejected by a federal court in New York.
American said that it was pleased “that the court is allowing American’s principal antitrust claims to proceed and that the court has rejected the defendants' arguments on key legal issues.”
In addition, American said that it was also important that the court has held that American can proceed with its claims that Sabre has monopolized the market for provision of airline booking services to travel agents, and separate claims that Sabre and Travelport each has unlawfully monopolized the market for the provision of airline booking services to their respective subscribers.
“The order permits American to raise additional antitrust claims based on newly discovered evidence, including that Sabre unlawfully organized a group boycott against American, and that Sabre and Travelport illegally conspired with each other to prevent competition from American’s direct connect technology,” American said in a statement.
American has until Dec. 5, 2011, to amend its complaint, but is not allowed to reassert the claims that Travelport’s agreements with airlines and travel agencies unlawfully restrain trade or that Travelport’s actions violate Texas state law.
Travelport said that it is “pleased that the court recognized the meritless nature of most of the claims brought by AA and severely restricted the scope of AA’s remaining claim. Travelport will continue to defend itself vigorously against this limited claim which Travelport views as being wholly without merit. Travelport remains confident that, after analyzing the facts, the court will find this claim as meritless as AA’s other claims.”
Travelport said that it does not believe the outcome of this dispute will have a material adverse effect on its results of operations or liquidity condition.
Sabre said that while the court is allowing American to continue to pursue other claims, that decision is only based on the assumption that American's allegations in its complaint were true -- which Sabre denies and which the court did not determine.
According to Sabre, the court said only that American may file the claims with the court and pointed out that the ruling specifically said that "the Court is not concluding that these claims are plausible and sufficient to survive." The court gave Sabre the opportunity to move to dismiss those claims.
“We believe that all of American's remaining claims are baseless and we look forward to proving that in court,” said Nancy St. Pierre, spokesperson for Sabre. “We still prefer to negotiate a new distribution agreement with American Airlines that meets the needs of all constituents, despite AA's interest to use litigation as a negotiating tool.”
“At this point, we cannot provide details because the order is filed under seal,” American said in its statement. “However, to be clear, the key monopolization claims that American pled were deemed plausible by the court and remain an important part of the case. We are confident in the merits of our claims and will continue vigorously pursuing this litigation.”
The court also dismissed all antitrust claims against Orbitz Worldwide, which said that the ruling was “consistent with our long-held position.”
“While the court's decision does indicate that American can file a new claim, the court's order notes that the court has not concluded that the claim is plausible or sufficient to survive a motion to dismiss,” according to a statement by Orbitz.