Antitrust Law Daily Wrap Up, TOP STORY—American Airlines, Sabre Holdings Agree to Settle Disputes, (Oct 31, 2012)

By Jeffrey May, J.D.

American Airlines and global distribution system operator Sabre Holdings have resolved legal disputes over Sabre’s alleged efforts to block American’s “AA Direct Connect” for distributing airline fare, flight, and availability information and for providing booking services to travel agents. The companies issued a joint statement on October 31, 2012, announcing that they have settled their disputes and have renewed their current distribution agreement for multiple years.

Under the settlement agreement, American will negotiate with Sabre for additional technology services in the future. In addition, American is entitled to an undisclosed monetary payment from Sabre. According to the announcement, American will continue pursuing its Direct Connect initiative. The terms of the settlement and distribution agreements require review and approval by the court presiding over AMR Corporation’s restructuring procedures, it was noted.

Although further details regarding the settlement were not announced, the pact would seemingly resolve American's claims against Sabre in parallel state and federal suits.

In November 2010, American filed a Texas state court lawsuit against global distribution system operator Travelport, alleging state-law causes of action, including breach of contract and tortious interference with prospective business relations. American later added Sabre as a defendant. In that action, which recently went to trial, American alleged that it was losing business to competitors because Sabre had been biasing American’s fares and schedules in Sabre’s displays on its computerized reservation system. The carrier also contended that Sabre had more than doubled the fees it charged to distribute American flight/fare data in breach of the parties’ contract. In July 2011, after filing a federal antitrust lawsuit, American added an additional antitrust claim against Sabre in the state action for monopolization in violation of the Texas Free Enterprise and Antitrust Act. Sabre made an ultimately unsuccessful attempt to have the matter heard in federal court.

American filed a federal antitrust lawsuit against online travel agency Orbitz and global distribution system operator Travelport for Sherman Act violations in the federal district court in Ft. Worth in April 2011. American added Sabre as a defendant in June 2011. American alleged that Orbitz, Travelport, and Sabre engaged in an "industry-wide conspiracy" to exclude American's Direct Connect from the market for the distribution of airline fare, flight, and availability information and the provision of booking services to travel agents. The carrier contended that Travelport and Sabre orchestrated a group boycott along with numerous travel agencies to retaliate against the carrier for its efforts to implement Direct Connect. In August, the federal district court denied motions to dismiss the Sherman Act suit (2012-2 Trade Cases ¶78,026).

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