Sabre issues US Airways counter-claim alleging 'conspiracy'

By Travolution
By Travolution
January 18, 2013 05:15 PM GMT

GDS Sabre Travel Network has issued an anti-trust counter claim in a New York court against US Airways.

The firms have been trading allegations of uncompetitive behaviour for well over a year, the airline accusing Sabre of ramping up distribution costs.

Sabre faces an anti-trust claim filed by US Airways in April 2012 to which this latest move is a counter-claim.

However, in a 56-page document filed at the United States District Court Southern District of New York, Sabre alleges US Airways has conspired with others against Sabre.

Among those said to be co-conspirators with US Airways are other airlines in the Star Alliance and Farelogix, a technology firm offering an alternative distribution platform to the traditional GDSs.

It accuses the airlines of agreeing behind closed doors the terms by which they will work with Sabre, via organisations including Iata, and Participating Airlines Advisory Council (PAAC) and Opon AXIS, groups set up by Farelogix. 

Sabre also claims that recent merger talks between US Airways and rival American Airlines have given the carriers ample opportunity to conspire on their agreements with GDSs.

In its filing Sabre claims that GDSs, through, facilitating comparison shopping actually drive down prices which is good for consumers.

It says moves by airlines to stop filing its full fare content in public and entering agreements in which certain fares are only made available to certain types of customer is bad for the consumer and for competition.

The filing states: “They have entered into agreements on the technological means by which they will deal with Sabre and other GDSs, including abandoning the current system of public, non-discriminatory fare filings in favor [sic] of discriminatory fares available only to certain travellers.

“They have agreed on the price terms that they will pursue from the GDSs and have co-ordinated their negotiation strategies. These horizontal conspiracies and boycotts violate the anti-trust laws.”

It also says: “One effect of these agreements will be to reduce competition among airlines on the terms on which they provide airline content for distribution.

“Absent the conspiracy, US Airways and its co-conspirators would compete with each other on the content they distribute through Sabre and other GDSs and on the booking fees that they pay the GDSs to distribute that content.

“In general, the more content that an airline provides to a particular GDS, the more attractive are the financial terms the airline pays for the GDS’s distribution services.

“In addition, withholding content from Sabre and other GDSs, including by not filing content publicly, will make comparison shopping more difficult, reducing transparency and facilitating price discrimination in airline ticket pricing, resulting in decreased competition between the airlines in providing air travel and higher prices for travelers.  

A sabre spokeswoman said: “It is very disappointing to learn that US Airways did not negotiate with us in good faith in 2011, and instead intended all along to sue us as soon as they signed the agreement. Given its strategy, it appears that US Airways never had any intention of living up to its agreement.”

On its website US Airways has the following statement:

Sabre has significant control over the distribution of airline tickets to travel agents. Sabre has taken a variety of actions to maintain its power.

We believe this is anti-competitive and, ultimately, harms consumers and stifles the marketplace. To change the system and level the playing field for all participants, US Airways has filed a federal civil antitrust lawsuit against Sabre.

US Airways believes that Sabre, a dominant distributor of airline fares and content to travel agents in the United States, has engaged in a series of actions that have resulted in:

• Higher distribution costs for US Airways and as a result, higher costs for consumers;
• Reduced innovation, which limits the ability of US Airways to generate revenue from new products and services; and
• Limited choices for travel agencies to access US Airways content.

Prior to Sabre using its monopoly power to enforce full content agreements, US Airways frequently offered more favorable web only and other promotional fares at discounted levels through select distribution channels.

Sabre's full content requirements effectively have eliminated US Airways’ ability to offer these types of fares and resulted in increased ticket prices for consumers.

US Airways and travelers would see enormous benefits if Sabre were forced to compete on both price and innovation. US Airways is committed to trying to ensure that Sabre can no longer continue its anti-competitive conduct at the expense of consumers and US Airways.

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