US Airways follows American’s lead, files antitrust suit against Sabre GDS
Published: April 22, 2011
US Airways filed a civil antitrust lawsuit against Sabre Holdings Corp. on Thursday to halt what it calls “anticompetitive and anti-consumer” practices by the GDS, as well as recover monetary damages. The action comes a week after American Airlines filed a lawsuit against Travelport—parent of Galileo, Apollo and Worldspan—and Orbitz alleging similar antitrust violations (ATW Daily News, April 14).
In its lawsuit, US charges that 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.” The airline 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.”
For example, US said it frequently offered more “favorable Web-only and other promotional fares at discounted levels through select distribution channels.” US claims that Sabre’s full content requirements “effectively have eliminated the airline’s ability to offer these types of fares and resulted in increased ticket prices for consumers.” Sabre also “for some time also threatened to block US Airways’ Choice Seats program from being offered through other distribution channels.” In its suit, US said that “over 35% of [its] revenue is booked through Sabre,” adding that if it lost the revenue booked through Sabre it “would likely be forced into bankruptcy.”
US said that “all of these actions by Sabre hurt consumers through higher prices, reduced innovation and fewer choices.” The airline said it “does not expect the lawsuit to disrupt its recent agreement for the display and distribution of tickets” (ATW Daily News, March 2).
Sabre spokeswoman Nancy St. Pierre told ATW, “We are aware of US Airways’ actions today and are reviewing the details of their legal claims. We will have further comment when appropriate.”
US President Scott Kirby said that the carrier wants to be able to widely distribute its products and services to consumers in a cost-effective and efficient way, “but Sabre continues to erect roadblocks to this goal.”