Travelport, American Settle Antitrust Lawsuit

Travelport and American Airlines settled their antitrust lawsuit and signed a new long-term, global distribution agreement.

Under the new agreement, Travelport will likely be the first GDS to offer access to American’s ancillary products and services.

Integration of technologies
The two companies will integrate their technologies – Travelport’s Universal API and American’s XML-based direct-connect interface – to enable Travelport subscribers to sell products like American’s Main Cabin Extra, which provides four to six additional inches of legroom in seats at the front of the economy cabin and boarding in Group 1.

In a statement, Derek DeCross, vice president of global sales for American Airlines, said, “Travelport deserves praise for working with American to create a solution that can display all of our product options to travel agents in a transparent, customer-friendly way that also clearly differentiates American’s products from other airlines.”

The technical integration is, apparently, what American wanted from the beginning.

Travelport connects with Air Canada in similar fashion to provide agents in Canada with its Agencia desktop, which can access the carrier’s fare families, a la carte products and travel passes. Travelport has touted that deal as a model for the future.

‘Perfect partner’
In November 2010, Travelport announced that Southwest Airlines would connect travel sellers via Travelport’s Universal API, providing agency subscribers with a greater level of access and functionality.

According to American, it asked Travelport for the same type of agreement, but the GDS company refused. In one of several legal actions arising from the dispute, American said Travelport told the carrier that “American helped create the GDS beast and should continue to live with it.”

Dan Westbrook, vice president and general manager of global distribution sales and service for Travelport (and a former American Airlines executive), called American “the perfect partner with which to build upon Travelport’s airline partnership approach to merchandizing, optional ancillary sales and product differentiation. All of our subscribers will continue to access American’s full content, while American can merchandize its full line of products through Travelport, providing consumers and travelers a transparent marketplace and the ability to shop and book all services at their channel of choice.”

Monetary matters
American settled with Sabre in late October, and their agreement called for Sabre to make monetary payments to American. American’s fourth-quarter results included “a $280 million benefit from settlement of a commercial dispute.”

The announcement of the Travelport-American settlement did not mention any monetary terms. However, Travelport chief executive Gordon Wilson said during his earnings conference call earlier this week that the company had set aside an “appropriate” reserve in the event of a settlement.

The terms of the settlement agreement require review and approval by the court presiding over AMR Corp.’s restructuring.