American Airlines Lashes Out at Sabre in New Court Filing
American Airlines Lashes Out at Sabre in New Court Filing
By Kate Rice
In the latest round of the ongoing legal battle between American Airlines and Sabre over airline distribution, American has filed court papers accusing Sabre essentially of cutting off its nose to spite its face.
The airline also maintains that Sabre has spent five years secretly plotting ways to prevent American and other carriers from pursuing a direct connect strategy that is at the heart of a nearly year-old wrestling match between American, the GDSs and online travel agencies (OTAs).
American’s filing in a Texas court yesterday accuses Sabre of “secret collusive boycott agreements,” “anti-competitive contract terms,” “punitive bias actions.” The airline is calling Sabre “the ring leader in a classic hub-and-spoke conspiracy.” Nancy St. Pierre, a spokeswoman for Sabre, said that the GDS "denies the allegations and this is yet another example of American Airlines distorting the facts and trying to use the courts to negotiate a new contract. We remain willing and committed to negotiating a new distribution agreement that meets the needs of all constituents whenever the airline is ready."
The battle between American and the GDSs has been in the public arena since last November, when American said it would pull its fares from Orbitz, the OTA partially owned by Travelport.
American is pursuing a direct connect strategy that could cut out the GDSs, the main marketplace for airfares for the past half century, from much of that process. In the end, of course, it is a battle over dollars -- the airlines pay GDSs booking fees for displaying and distributing their fares, although airlines have succeeded in reducing those fees over the past several years.
Instead of distributing through the GDSs, American wants to go straight to consumers via individual distribution channels rather than through the GDSs, although it has said that it is willing to work with the GDSs on its direct connect strategy.
The airline wants to tailor the product information it shows to customers according to what it knows about them, offering certain products to frequent travelers and others to occasional travelers.
The problem is that the GDSs have enabled consumers and travel agents to comparison shop airfares and schedules side by side for years. Direct connect makes this more difficult, although other technology providers are building systems to enable comparison shopping.
The ability to comparison shop is increasingly important as airlines break down various services that consumers have to pay for. This makes it tougher for consumers to know the total cost of a flight.
Airlines have not been entirely transparent about this process, which the U.S. Department of Transportation has addressed through a tightening of consumer protection rules, the first phase of which went into effect last month.
The next phase kicks into place in December. American said in its latest court filing that Sabre has anticipated technological developments that could lead to airlines setting up direct connect programs like American’s.
Because Sabre could see the writing on the wall, American said, it structured the wording of its contracts with American in a way makes it difficult for the airline to implement direct connect.
