US AIRWAYS AND SABRE: THE END IS IN SIGHT
April 3, 2017
Sabre Holdings Corp. and US Airways (now American Airlines Group) seem to be at the end of a long-running litigation over claims that Sabre violated Antitrust and Anticompetition rules. On March 21, 2017 a U.S. District Court Judge in Los Angeles denied Sabre’s request to overturn a jury verdict that awarded $15 million to US Airways.
Sabre, the largest Global Distribution Systems (GDS) provider for air bookings in North America, was accused by US Airways of hindering trade via forced unfavorable contracts terms. The lawsuit focused on a 2011 contract between the airline and online booking provider that required US Airways to supply Sabre with access to all of its seats so that travel agents could sell US Airways’ seats to corporate and leisure customers.
The original jury verdict, awarded to US Airways in 2016, found that Sabre unreasonably restrained trade but that it had not conspired with other firms to cause injury to US Airways. US Airways successfully argued that Sabre’s immense market share in the GDS industry placed US Airways at a disadvantage in the negotiation of the 2011 contract as 38 percent of US Airways’ revenue was generated through Sabre sales while only a small amount of Sabre revenue was generated from US Airways ticket sales.
US Airways has requested $122 million in attorneys’ fees for the six-year litigation. The Court has yet to rule on the motion.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).
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