Bloomberg News

Sabre Seeks Dismissal of US Airways’ Antitrust Complaint

July 01, 2011

(Updates with airline’s comment in fifth paragraph.)

July 1 (Bloomberg) -- Sabre Holdings Corp., embroiled in a dispute with airlines over fare and flight data distributed to travel agents, asked a U.S. judge to dismiss an antitrust lawsuit brought by US Airways Group Inc.

The suit, filed in April in federal court in New York, doesn’t allege any anticompetitive conduct and fails to define a plausible market, lawyers for Southlake, Texas-based Sabre said in court papers filed yesterday. US Airways is using the suit to renegotiate a three-year contract signed in March, Sabre said.

“The antitrust laws are not a vehicle for large corporations to renegotiate the terms of their commercial agreements,” Sabre lawyers wrote. “The new agreement contains nearly identical provisions to the contract US Airways signed in 2006 and operated under for five years without complaint.”

US Airways followed AMR Corp.’s American Airlines in suing Sabre, the largest U.S.-based so-called global distribution system, as the 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. Sabre collects and shares flight data, and owns travel website Travelocity.com.

“We are still in the process of reviewing Sabre’s recent filing, but would note that Sabre’s anti-competitive and anti- consumer practices are still being investigated by the Department of Justice and are also the subject of other litigation,” Todd Lehmacher, a spokesman for Tempe, Arizona- based US Airways, said today in an e-mail.

Fares Pulled

In its April lawsuit, US Airways said Sabre “engaged in a pattern of exclusionary conduct to shut out competition, protect its monopoly pricing power and maintain its technologically obsolete business model.”

In December, Fort Worth, Texas-based American pulled fares from travel agent Orbitz.com as the carrier pushed to use a proprietary computer system to share data, bypassing distributors.

In May, Sabre and Atlanta-based Travelport Inc. said they were cooperating with an investigation by the U.S. Justice Department into possible antitrust violations. American, US Airways and Delta Air Lines Inc. also received Justice Department inquiries.

Requiring airlines to provide information on all publically available fares promotes “comparison shopping and price competition among airlines,” Sabre said in its filing yesterday. US Airways, while it likes revenue from the distribution system, “no longer likes the transparency and price competition,” lawyers for Sabre said.

The case is U.S. Airways Inc. v. Sabre Holdings Corp., 11- cv-02725, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Stephen Farr, Charles Carter.

To contact the reporters on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net; Mary Schlangenstein in Dallas at maryc.s@bloomberg.net.

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Ed Dufner at edufner@bloomberg.net.


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