This August, barring further delays or a settlement, the first of American Airlines’ antitrust lawsuits against Travelport and Sabre will go to trial in a state court in Tarrant County, Texas.
Meanwhile, the U.S. Department of Justice is investigating GDS companies’ business practices, and it recently began requesting information from travel agencies.
These events have created a lot of uncertainty about the future of the relationships of airlines, GDSs and agencies.
While there are many unknowns about the outcome of the lawsuits and the DOJ investigation, there are a few “knowns.” Here, according to those in the know, are five certainties or near-certainties.
1. While the Justice Department has some powers, there are things it cannot do: It cannot enact regulations or impose new rules on GDSs. When it completes its probe of the industry, it can either close the investigation or bring a lawsuit. The court may order some injunctive relief, or the parties may come to a settlement.
2. Very few antitrust cases – less than 14% – go to trial. Those that do involve claims for damages, injunctive relief or both, according to Antitrust Settlements and Trial Outcomes, a research paper by Jeffrey M. Perloff, an economic researcher at the University of California Berkeley. The majority of cases are settled or dismissed. Of the cases that go to trial, less than 5% are won by the plaintiff, Perloff’s research found.
3. American’s attorneys’ fees are running about $2 million a month, according to Michael Weiner, co-chair of the antitrust and competition group at Dechert LLP, an international law firm. Weiner is representing Travelport in the lawsuits. That’s a “staggering” amount, he said. “I question whether this is the best use of resources for a bankrupt company.”
4. Weiner said American’s lawsuit includes claims that contradict statements the carrier has made in the past. For example, it has told the court that “we have no choice but to use every GDS.” But in 2006, during the last round of airline-GDS negotiations, it informed travel agencies that “it’s possible we may not participate in all GDSs going forward.”
5. There are three possible outcomes of an antitrust lawsuit, according to Weiner:
- It can be dismissed on the pleadings; in other words, the judge decides that everything in the claim is true but still does not violate the law.
- If there is no material issue in dispute, one of the parties could move for a summary judgment. The judge can then decide the case, either directly or via a directed verdict.
- The third possibility is that the case will be decided by the jury.