US Airways Triumphs In Antitrust Lawsuit Against Sabre

The jury that heard US Airways’ antitrust lawsuit against Sabre found that the GDS company violated antitrust law with its “full-content” contract provisions, thereby unreasonably restraining trade.

Full-content clauses have become the norm in many GDS-airline contracts; they require airlines to provide all their published fares, including those published only in their own channels, to the GDS. In general, failure to provide full content would result in much higher segment fees.

The crux of US Airways’ case was that the clause prevented the carrier from providing such information first to lower-cost distribution channels, such as web-based alternatives. Competition would be “clearly” enhanced if US Airways had that ability, the carrier claimed.

The jury awarded the airline $5.1 million in damages, which will be trebled by law. US Airways had sought $44 million in damages, but it was made clear by its conduct throughout the case that quashing the full-contract clause was more important than the money.

The jury found that US Airways did not provide sufficient evidence of another claim made in its lawsuit—that Sabre conspired with Amadeus and Travelport not to compete with each other for better terms from airlines on issues like fares or ancillary services.

It’s not clear whether the verdict on contract provisions will prove to be the victory that US Airways—now American Airlines, since the merger of the two carriers in 2013—had hoped for, both in this lawsuit and American’s lawsuit against Sabre and Travelport, which it settled in 2012.

The verdict does not affect other airlines’ contracts with GDS companies. However, it may cause GDS providers to consider the consequences of insisting on contract provisions that airlines have fought for years and that a jury has now found to be anticompetitive.

Sabre, meanwhile, plans to file a motion to set aside the verdict immediately.

“The jury sorted through a complicated case that involved hypothetical economic theories, intricate technology discussions and months of testimony,” it said in a statement. “We continue to believe we operated fairly and lawfully in an extremely competitive marketplace as Sabre provides efficient distribution, innovative technology and transparency that benefits suppliers, travel agents and consumers alike.”

If the court declines to grant its motion, Sabre said, it will pursue an appeal.

“Sabre believes it acted lawfully and fairly, and we do not anticipate any impact to existing offerings,” it said. “In the meantime, we will continue to work with American Airlines, focusing our efforts on helping them drive business success with smart technology.”

American said it was “very pleased” with the verdict. “We have long contended that the contractual provisions at issue–provisions that Sabre has made a condition to participate in its global distribution system–have reinforced Sabre’s market power, stymied competition and harmed us and the travelers we serve,” it said in a statement.

“Now that the jury has agreed with us, we hope to see changes in the way our services are sold, and we expect technology and innovation will create even better and more transparent ways for us to distribute our products.”