Technology

American Airlines wins $5.1m Sabre antitrust lawsuit

Posted by Phil Davies on
American Airlines wins $5.1m Sabre antitrust lawsuit

American Airlines was awarded nearly $5.1 million in an antitrust lawsuit that accused Sabre Corp of harming competition and charging it grossly inflated booking fees.

A federal jury in Manhattan found Sabre liable for unreasonably restraining trade through contractual provisions, awarding a sum that under federal antitrust laws can be tripled to $15 million.

The jury rejected a separate claim that Sabre had conspired with its competitors to not compete with each other. Sabre is considering an appeal against the ruling.

The verdict was a fraction of the up to $73 million that American Airlines, suing under its former subsidiary US Airways, sought at trial.

Nevertheless, Chuck Diamond, a lawyer for the airlines, said he was “obviously very gratified” by the verdict, which came in a lawsuit filed in 2011 by US Airways prior to its 2013 merger with American Airlines.

Sabre said after the verdict: “The jury sorted through a complicated case that involved hypothetical economic theories, intricate technology discussions, and months of testimony.

“We continue to believe we operated fairly and lawfully in an extremely competitive marketplace as Sabre provides efficient distribution, innovative technology and transparency that benefits suppliers, travel agents and consumers alike.

“We will continue to defend the interests of consumers who seek transparent and efficient shopping, booking and servicing of travel; we therefore expect to file a motion to set aside the verdict immediately, which would award $5.1 million in single damages to US Airways.

“To the extent the court declines to grant the motion to set aside the verdict, we will pursue an appeal. Sabre believes it acted lawfully and fairly, and we do not anticipate any impact to existing offerings.

“In the meantime, we will continue to work with American Airlines, focusing our efforts on helping them drive business success with smart technology.”

The case concerned fees that Sabre and other travel reservation systems collect from airlines to display flights for booking.

At trial, Diamond in his opening statement on October 24 contended that Sabre used its power in the industry to “bully” airlines into paying unfair fees and signing unfair contracts that suppress competition and maintain its position, Reuters reported.

The lawsuit claimed that provisions of a 2011 contract between US Airways and Sabre, including those governing what fares the airline makes available to a computerised network by Sabre used by travel agents, harmed competition.

The airline also contended that Sabre conspired with its two competitors in the industry to not compete with each other for airline content like flight and fare information at the expense of consumers and innovation.

“The lawsuit is here because of the way they went about maintaining their market power and then what they have done exercising it,” Diamond said in his opening statement.

Sabre denied conspiring with competitors, and said its contract with US Airways benefited competition.

Chris Lind, a lawyer for Sabre, told jurors US Airways was far from powerless as it could leave the network, causing agents to stop using it.

“US Airways leveraged Sabre into getting actually the terms that they wanted and importantly the price that they wanted,” he said.

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