US Airways alleges anticompetitive practices in Sabre suit

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Two months after signing a distribution agreement with Sabre, US Airways has filed a federal civil antitrust lawsuit against the global distribution system (GDS) claiming anticompetitive and anti-consumer practices.

The suit, which was filed in the Southern District of New York and seeks monetary damages, highlights a growing dissatisfaction amongst airlines in the current distribution system.

US Airways' claims are broad. Over 35% of US Airways' revenue is booked through Sabre and Sabre-affiliated travel agents. The carrier claims Sabre "has engaged in a pattern of exclusionary conduct to shut out competition, protect its monopoly pricing power, and maintain its technologically-obsolete business model".

It contends that Sabre "has wielded its significant market power and control through exclusionary commitments from travel agents and other GDSs, as well as through anticompetitive requirements placed on US Airways and other airlines in order to sell their tickets".

US Airways' complaint also alleges that Sabre has been aggressive in suppressing the ability of travel agents to book tickets directly with airlines' own reservation data, which would effectively enable them to bypass GDSs altogether.

Today's lawsuit falls on the heels of the recent execution of a new distribution agreement between Sabre and US Airways, which was reached in late February of this year. US Airways claims it was forced to acquiesce to Sabre's "my way or the highway" demands as a part of any new deal.

A Sabre spokeswoman says: "We are aware of US Airways' actions today and are reviewing the details of their legal claims. We will have further comment when appropriate."

Several billion dollars annually are paid by airlines to GDSs, and a portion of those funds rebated to travel agencies. American Airlines recently went to war with some of the biggest names in travel distribution in a bid to reshape the current structure.

Firstly, American removed its inventory from online travel agent Orbitz, which is 48% owned by GDS Travelport. The carrier's decision to drop Orbitz set off a chain reaction in the industry that saw rival online travel agency Expedia, a Sabre user, cease offering American's fares on its site when its contract expired in December.

Sabre then opted to disfavour American's fare offerings from its GDS listings and eliminate booking fee discounts, a blow that prompted American to file a lawsuit against the firm. But American won a restraining order preventing Sabre from taking that action, and later the two parties reached a truce to put litigation on hold until 1 June and revert back to their previous arrangement.

US Airways does not make mention of any disfavouring of inventory on the part of Sabre in its statement.