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January 18, 2013

Sabre files anti-trust countersuit against US Airways

Sabre Holdings filed an anti-trust countersuit against US Airways on Friday in federal court in New York.

The Southlake-based company says that US Airways did not negotiate with Sabre in good faith in 2011 and had intended to sue as soon as they had signed its new contract with the travel distribution firm.

The lawsuit says:

"US Airways acted maliciously and in bad faith, deliberately intending to invalidate the core terms of the agreement that it voluntarily signed so as to deprive Sabre of the benefits of the contract, rather than performing that contract in good faith. By doing so, US Airways has called into question its intent to abide by its contractual commitment to provide its content to Sabre throughout the contract term, a commitment that is of great value to Sabre. Part of the value that Sabre derived from the agreement was a cooperative three-year relationship that assured its travel agent subscribers that US Airways content would be available to them if they contracted with Sabre."

It continues:

"US Airways and its co-conspirators airlines engaged in a purposefully anticompetitive scheme targeted at Sabre and other GDSs.[global distribution systems] Instead of individually negotiating terms with GDSs as they would in a competitive market, the conspirators have agreed to fix the terms on which they will deal with GDSs, including as to content and price. Sabre competes with other GDSs and distribution channels to provide travel agents with the ability to search for and book air travel and ancillary services. The conspiracy described herein has, and, unless restrained, will continue to, impair Sabre’s ability to compete for travel agent business."

At issue are the fees US Airways and other airlines pay the big travel reservation systems, called global distribution systems, to display flights and make bookings. US Airways says that about $3.5 billion , or 35 percent, of its ticket revenue is booked through Sabre.

US Airways filed its anti-trust suit against Sabre in April 2011, two months after the two parties had reached a new distribution agreement.

American Airlines filed a similar anti-trust suit against Sabre in Texas in 2011. That case was settled out of court in October and it appears that as part of the settlement, American received a $280 million payment from Sabre.

-Andrea Ahles


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