Judge Tosses Out Travelport’s Claims in AA Antitrust Suit

A federal judge dismissed Travelport’s antitrust claims against American Airlines, saying that Travelport “has not alleged facts sufficient to establish antitrust standing.”

Travelport had filed its complaints as a counterclaim to American’s April 2011 lawsuit against Travelport and Sabre. American responded with a motion to dismiss.

In his decision, Judge Terry Means of the U.S. District Court, Northern District of Texas, said that because the court rejected Travelport’s legal theories concerning antitrust injury, granting permission to amend the counterclaim would “prove futile.”

He dismissed with prejudice Travelport’s counterclaims for monopolization and conspiracy-to-monopolize.

Travelport’s claims
Travelport had charged that American “is withholding or threatening to withhold content from efficient, multi-airline GDSs, and leveraging the value of its content as one of the world’s largest airlines, to force travel agencies to switch to [American’s] inferior, single airline AA Direct Connect.”

Travelport also said American “is refusing to deal with travel agencies unless they agree to abandon Travelport and other GDSs” in favor of AA Direct Connect. It said American is “conditioning travel agencies’ access to its full array of fare and flight information on their willingness to use AA Direct Connect.”

Since AA Direct Connect “does not have the ability to perform many of the functions that GDSs perform for travel agencies,” American plans to have travel agents use the GDSs for those tasks, essentially giving American a “free ride” in the systems, according to Travelport.

GDS ‘has not suffered’
But Means said that American’s alleged “fragmenting” of flight and fare information through AA Direct Connect is “a harm suffered primarily by travel agents and passengers.” He said that “Travelport has not suffered antitrust injury and therefore lacks standing.”

The GDS company’s counterclaim also said that American has monopoly or near-monopoly power in certain city-pairs, such as Dallas/Fort Worth-New York and Dallas/Fort Worth-Tokyo.

In his ruling, Means said, “The competitors in these markets are airlines, and the consumers are travel agents and passengers. Travelport is neither.”

Travelport’s response
In a statement, Eric Bock, executive vice president, chief legal officer and chief administrative officer for Travelport, said the court dismissed the claims on legal standing grounds rather than on its merits.

“Essentially the Court held that Travelport was not the appropriate party to defend consumers and travel agents against the alleged harm caused by AA’s monopolistic conduct,” Bock said. “We are still analyzing the opinion and our options.”

American said Travelport’s claims were “meritless” and were “intended to take the focus off of the anticompetitive conduct of Travelport and Sabre.”

In a statement, the carrier said, “We remain open to amicably resolving our claims against the defendants, which remain pending, but absent an agreement that ends the anticompetitive practices and accounts for the harm done to American, we will continue to pursue our legal rights.”