Last updated: 01:50 AM ET, Mon October 29 2012

Sabre Asks Judge to Dismiss US Airways’ Antitrust Lawsuit

Features & Advice | American Airlines | July 04, 2011

Sabre Holdings has asked a federal district court judge in New York to dismiss the antitrust lawsuit filed by US Airways against Sabre in April. “This case is nothing more than US Airways' attempt to renegotiate the three-year contract it recently signed with Sabre,” Sabre said in its filing.  

US Airways filed the suit two months after the two parties reached a new distribution agreement. The airline is asking for three times the amount of damages it claimed it sustained, including attorneys fees. At issue are the fees US Airways and other airlines pay for global distribution systems to display flights for travel agents and make bookings. US Airways says that about $3.5 billion, or 35 percent, of its ticket revenue is booked through Sabre.

Sabre said the lawsuit is not legitimate and that there is no conspiracy or monopoly among distribution systems, as US Airways claims. “The antitrust laws are not a vehicle for large corporations to renegotiate the terms of their commercial agreements,” Sabre said in its filing. “The new agreement contains nearly identical provisions to the contract US Airways signed in 2006 and operated under for five years without complaint….Because Sabre competes directly with two other GDSs in the United States, [US Airways] does not -- and cannot -- allege that Sabre has monopolized a broader GDS market, let alone the market for distribution of travel services (including distribution through the Internet, and directly by the airlines through their websites and direct connections with their customers).”

US Airways followed American Airlines in suing Sabre as both carriers seek more control over dissemination and sale of their products. More than 35 percent of US Airways’ annual revenue is booked through Sabre or Sabre-affiliated travel agents, the airline said in April. In its lawsuit, US Airways said Sabre had “engaged in a pattern of exclusionary conduct to shut out competition, protect its monopoly pricing power and maintain its technologically obsolete business model.”

American Airlines has filed a similar antitrust lawsuit against Sabre in Texas. The two parties have been in a legal battle for the past month with the current distribution contract between the two set to expire in the fall. In May, the U.S. Department of Justice launched an investigation into Sabre and other distribution systems to look at possible antitrust violations.

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