Antitrust Law Daily Wrap Up, TOP STORY—US Airways Conspired with Competitors to Preclude Sabre Holdings from Facilitating Sales of Airline Services: Counterclaim, (Jan 18, 2013)

By John W. Arden, J.D., LLM.

In a motion for leave to file a counterclaim to an antitrust suit against it, Sabre Holdings Corp. alleged that US Airways and other airlines conspired to preclude it from facilitating the sale of airline tickets and ancillary services through travel agents (US Airways, Inc. v. Sabre, Inc., January 18, 2013). Sabre filed a notice of its motion to file an amended answer and counterclaim and a memorandum of law in support of its motion in the federal district court in Manhattan.

US Airways originally filed suit on April 21, 2011, claiming that Sabre monopolized the market for flight and reservation information. On September 8, 2011, the district court granted Sabre’s motion to dismiss two counts and ordered US Airways to amend its complaint to specify the sources of information and bases of belief that were omitted from the original complaint. It denied the airline’s request for leave to replead the dismissed counts. US Airways filed its amended complaint on September 22, 2011, and Sabre filed its answer on December 19, 2011.

During discovery, US Airways and third parties produced documents establishing that the airline had been in a “long-running and wide-ranging conspiracy to collude with its airline competitors on the terms on which they will deal with Sabre,” according to the memorandum of law. Since this alleged conspiracy violated the antitrust laws, Sabre asked the court for leave to amend its answer to assert a counterclaim under Section 1 of the Sherman Act.

Specifically, Sabre alleges that US Airways has regularly met and entered into agreements with other airlines about the terms on which they would deal with Sabre. In the agreements, the airlines promised to withhold from Sabre the ability to facilitate the sale of airline services, such as airline tickets, preferred seats, baggage, and preferred boarding, Sabre charged.

“Historically, US Airways and other airlines have made that content available to Sabre (and other competitors), and Sabre (and its competitors) has provided computer systems to aggregate multiple airlines’ content to enable efficient searching and booking of air travel by travel agents and, through online travel agents like Expedia, travelers,” the memorandum alleged. “US Airways and its co-conspirators would like to end such comparison shopping and thus they have conspired to eliminate or constrain access to content by [Global Distribution Systems].”

Sabre argued that leave to amend should be granted because (1) it would cause no prejudice to US Airways, (2) there was no bad faith on the part of Sabre, (3) granting leave to amend would not be futile, and (4) there was no undue delay in moving for leave to amend.

The case is Civ. Action No. 1:11-cv-02725-MGC.

Attorneys: George S. Cary (Cleary Gottlieb Steen & Hamilton LLP).

Companies: US Airways; Sabre, Inc.; Sabre Holdings Corp.

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