An attempt from Sabre, Travelport and Orbitz to have an antitrust claim made against them by American Airlines dismissed has been blocked by a US Federal judge.
This latest twist is part of a long drawn out tale which began in April 2011 when the carrier filed the antitrust suit against Travelport and Orbitz, adding Sabre to the claim later.
At the time American Airlines cited concerns over the anti-competitive nature of the GDS’s and online travel agency’s distribution agreements.
While the airline’s initial complaint was initially knocked back by a judge, it was allowed to submit a second amended complaint in which it alleges “an industry-wide conspiracy to preserve the GDSs market power”.
The US District Judge has said Sabre, Travelport and Orbitz must face the antitrust claims and found that the carrier had ‘stated a plausible section 2 conspiracy to monopolize claim’ and had ‘adequately pleaded the existence of a conspiracy’.
Anchoring American’s conspiracy allegation are facts that, taken as true and construed in American’s favor, support a reasonable inference of an industry-wide conspiracy between Sabre, Travelport, Orbitz and other travel agencies and trade associations.
A Sabre spokesperson says:
“There was no decision on the merits of the claims.  The judge did not say American’s claims were valid, only that American had made allegations sufficient to meet the minimal pleading requirements of federal court.
“We will continue to vigorously defend ourselves against these baseless and meritless claims. Â We look forward to our first opportunity to present evidence about the real facts.”
Tnooz has also contacted Travelport for comment.
UPDATE:
An official from American Airlines says:
“The court’s order confirms that American has adequately pleaded numerous antitrust claims against the defendants, including monopolization and conspiracy claims.
“We would prefer to resolve our dispute with the defendants amicably, but any such resolutions need to end anticompetitive practices and to account for the harm done to American. We are convinced these claims have substantial merit, and absent settlements, we intend to continue vigorously pursuing our legal rights.”
NB: Court image courtesy of Shutterstock.
Related posts:
About Linda Fox
It is interesting to note that in the unsealed court documents from Early August, the ruling by Judge Terry Means was quite specific about how he had approached the issues in front of him. To wit not only did he allow American Airline’s case to proceed but also he dismissed the counter claims from both Sabre and Travelport as well as motions to dismiss the refiled charges from AA.
He based his decisions on the clear framework of the anti-trust law. He did not however address the actuality of AA’s claims leaving that for his courtroom. However he made it clear that if the facts could be proved then that was all AA had to do. In my view that simplified AA’s position.
There are other interesting statements in the ruling. With regard to the conspiracy charges which previously had been broad and not specific now he went into detail how the conspiracy charges met the criteria for the law. Further he named other conspirators in the suit not just the defendants . I suspect these other named and unnamed co-conspirators must be feeling a little uncomfortable about now.
While AA is holding out an olive branch to the defendants – it would be hard in my opinion for the 2 GDSs to reach an agreement with AA. Unless that is they feared that without an agreement that their business would be materially harmed through the disclosure of some of the practices that had caused AA to file the case in the first place. However if AA should reach an agreement with the 2 defendants then other airlines might be interested in filing suits also. It appears that the case is so broad and now so specific that even if several of the charges are dismissed, that the GDSs are going to find the case heavy going.
This will be an interesting play to watch.
Cheers