AA’s Bankruptcy Court Approves Settlement With Sabre
by Michèle McDonald /American Airlines’ bankruptcy court last week approved the settlement agreement reached in the carrier’s antitrust lawsuits against Sabre.
The agreement, reached on Oct. 30, includes a multi-year renewal of their distribution agreement and allows American to continue pursuing its Direct Connect initiative.
Period for negotiation
The settlement also contains “an agreed upon period during which American will only negotiate with Sabre regarding a new passenger processing system,” according to documents filed in the carrier’s bankruptcy court.
“The parties are currently negotiating American’s use of the SabreSonic Customer Sales & Service System,” the documents stated.
The agreement calls for American to receive “substantial payments and credits from Sabre.” The amounts were redacted, as was the length of the negotiating exclusivity period.
An end to two lawsuits
The approval of the settlement brings an end to two antitrust lawsuits filed by American against Sabre in the state court in Tarrant County, Texas, and in the U.S. District Court, Northern District of Texas. Sabre filed counterclaims in both courts.
Travelport and Orbitz Worldwide remain defendants in the federal lawsuit, which has been stayed until Dec. 21 to allow the parties to meet with a mediator.
Sabre and American reached the agreement after five days of opening arguments and testimony in which American portrayed a Sabre initiative called Project 99 as a campaign to “take American down” through bias and a boycott by travel management companies.
The goal, according to American’s lawyers, was to punish the carrier for its Direct Connect program and to ensure that the idea did not spread to other airlines.
In depositions, executives from American Express, BCD Travel, Carlson Wagonlit and Expedia said Direct Connect was not fully integrated with mid- and back-office systems, required agents to do more work, had additional costs and lacked transparency. American Express estimated it would cost $200 million to change to Direct Connect.