American Airlines Group has won a court ruling that clears a path for a new trial next month on its claims that ticketing platform Sabre Holdings Corporation abused its market power and caused the airline USD300 million in overcharges and lost profit, Reuters reports.
The US District Court for the Southern District of New York, on March 24, denied two motions by Sabre to throw out anti-trust claims first brought by US Airways (Phoenix Sky Harbor), which merged three years later with American Airlines (AA, Dallas/Fort Worth). Sabre had moved to exclude certain testimony of a US Airways damages expert, and for summary judgement on US Airways claims. According to the court filing, US District Judge Lorna Schofield also did not preclude damages arising from anti-competitive behaviour between 2007 and 2011. Still, Schofield limited the damages American Airlines can seek from Sabre by finding its claims related to an earlier 2006 contract were now too stale.
Sabre Airline Solutions is a major Global Distribution System (GDS) through which travel agents worldwide book flights.
American Airlines has accused Sabre of setting restrictive contract terms and excessive fees, which the company has denied. The airline said in court filings that more than USD3.5 billion or 35% of US Airways' was booked through Sabre between 2010 and 2012.
According to the docket, a jury previously returned a verdict in favour of US Airways on its claim following a trial that stretched over three months in 2016. At the time, US Airways/American Airlines won about USD15.3 million on its claim of restrictive contract terms. Damages were limited to alleged overcharges paid by the carrier.
Sabre appealed, resulting in the case being remanded by the 2nd US Circuit Court of Appeals in 2019, which also reinstated US Airways' claim, dismissed in the earlier court decision.
American Airlines/US Airways challenges the alleged monopoly power exercised by Sabre in the GDS market, arguing that no other GDS competitor has successfully entered the US market in the last 30 years. It charges that Sabre has not innovated on technology; its economic profits far exceed the economic profits of its comparator firms and main customers; Sabre maintains a net fee that is far above the competitive level; and charges airlines different per booking fees that are not explained by differences in the cost of providing the service.