$5.1 million is not a lot of money for a giant global airline, but for US Airways — and later American — this was always about more than money. The airlines argue that firms like Sabre have long held too much power.
A federal jury in New York on Tuesday awarded American Airlines $5.1 million in damages in a five-year-old antitrust lawsuit concerning whether Sabre used its “massive power” over airlines to charge fees and “harm competition.”
The case was filed in 2011 by US Airways, which merged with American two years later. At the time, according to the original complaint, bookings through Sabre accounted for 35 percent of US Airways’ revenue — so much that the airline estimated it would need to file for bankruptcy if it lost it.
The suit, filed in the Southern District of New York, accused Sabre of using its “monopoly power” to effectively force US Airways into agreeing to a new contract that “contain[ed] numerous oppressive and anticompetitive terms designed by Sabre to harm competition and entrench Sabre’s dominance.” US Airways told the court it signed the contract “under protest.” Without the contract — and the “inflated booking fees” it required — the airline said it had no other way to reach the corporate travel agencies that participate in Sabre.
By law, according to American, damages will be tripled, so the carrier will receive slightly more than $15 million. The 11-member jury made the determination after an eight-week trial.
“We have long contended that the contractual provisions at issue – provisions that Sabre has made a condition to participate in its global distribution system – have reinforced Sabre’s market power, stymied competition, and harmed us and the travelers we serve,” American said in a statement.
According to Reuters, which covered the case closely, American did not persuade the jury that Sabre had colluded with its two main rivals, Travelport and Amadeus. American had argued the three companies had not been competing with each other for some business.
In a statement, Sabre said it plans to ask the court to set aside the verdict. If it is denied, the company will file an appeal, the statement said.
“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,” the company’s statement said. “We will continue to defend the interests of consumers who seek transparent and efficient shopping, booking and servicing of travel.”
Before its merger, American pursued similar legal claims against Sabre. American settled the action in 2012, and Sabre later told investors it took a settlement charge of more than $200 million.
With this trial now over, American said it wants to “see changes in the way our services are sold” and develop “better and more transparent ways” to sell its products.
Photo credit: US Airways has won an antitrust lawsuit against GDS provider Sabre. Mike Stone / Reuters