In a continuation of the US Airways vs Sabre drama (read more about it here, here, and here), Sabre has filed a countersuit in New York State court, claiming full denial of US Airways' accusations.
In turn, it accuses the airline of "anti-competitive" practices, such as encouraging other airlines to drop their inventory from the Sabre GDS and collusion.
US Airways claims in its suit that Sabre has been a bully, threatening to remove US Airways content from the Sabre GDS and potentially irreparably harming the airline's business.
In the original lawsuit, US Airways alleges:
"Sabre continued its bullying in March 2011, when Sabre issued a press release touting its full content agreement with US Airways in which Sabre wrongly stated that ‘US Airways recognizes the value of the Sabre global distribution system and our innovative leadership.’
"Contrary to this statement and as described in this complaint, US Airways ‘recognizes’ that Sabre has acted to supress innovation and that Sabre’s ‘value’ is primarily due to its own anticompetitive conduct."
Sabre's response is essentially that they did absolutely nothing wrong:
"Sabre denies that it has engaged in illegal conduct or that any conduct that it is alleged to have engaged in has harmed Plaintiff, competition, or consumers."
The lawsuit continues to break down Sabre's response to the original lawsuit, paragraph-by-paragraph, claiming often that "Sabre lacks knowledge or information sufficient to form a belief as to the truth" and thus denying a particular allegation on that basis.
Beyond responding to the airline's allegations, Sabre's counterclaim specifically lays out ways in which US Airways engaged in anti-competitive practices, including accusing it of colluding with other airlines and third-parties such as Farelogix.
The suit also alleges that US Airways, Boston Consulting Group, Farelogix and the IATA discussed pricing and strategy under the guise of trade association meetings. This would be a violation of anti-trust laws, which prevents collusion by competitors discussing pricing behind closed doors.
The concept of "flipping the model" is also a very serious allegation, which accuses the airlines of intentionally colluding to eliminate the GDS from the picture.
This counterclaim is a broad-stroke accusation of wide-spread conspiracy, and will most certainly be getting plenty of notice in the coming months as it plays out in the courts.
The full text of the counterclaim's Nature of Action:
1. This is an antitrust action against US Airways, Inc. (“US Airways”), for damages
and injunctive relief to stop it and its co-conspirators—including other airlines and a third-party
technology firm called Farelogix—from colluding with one another on the terms on which they
will deal with independent global distribution systems (“GDSs”), including Sabre.
2. Historically, US Airways and its co-conspirator airlines have distributed air travel
to travelers through the GDSs by publicly filing their available air travel options and negotiating
with the GDSs about what “content”—which includes airline tickets and ancillary products such
as assigned seats, preferred boarding, and bag fees—the GDS can offer to travel agents. Sabre
and other GDSs operate computer systems that aggregate this publicly filed information from
multiple airlines and allow efficient searching across it so that travel agents can compare options
across airlines and book the flights that best suit their customers’ needs.
3. Because GDSs facilitate comparison shopping, they increase competition between
the airlines and drive down ticket prices for consumers.
4. Over the past few years, US Airways and its co-conspirator airlines have
conspired to boycott Sabre and other GDSs by numerous means. Most prominently, they have
agreed to withhold content from, or to provide it only on certain terms to, Sabre and other GDSs.
They have entered into agreements on the technological means by which they will deal with
Sabre and other GDSs, including abandoning the current system of public, non-discriminatory
fare filings in favor of discriminatory fares available only to certain travelers. They have agreed
on the price terms that they will pursue from the GDSs and have coordinated their negotiation
strategies. These horizontal conspiracies and boycotts violate the antitrust laws.
5. The airlines often refer to the end goal of the conspiracy as “flipping the model.”
By this they mean that the airlines would no longer pay GDSs for distribution services and would
even require travel agents to pay the airlines to access content and make bookings, even though
those bookings benefit the airlines.
6. US Airways and its co-conspirators organized and implemented the conspiracy
through regular communications, including emails, telephone calls, and meetings held under the
guise of a variety of alliances, advisory committees, consortiums, and trade associations, such as
the Star Alliance, a group called “PAAC” set-up by a third-party technology company called
Farelogix, the so-called “Consortium” established by a consulting firm called Boston Consulting
Group (“BCG”), and a trade association called the International Air Transport Association
(“IATA”).
7. One effect of these agreements will be to reduce competition among airlines on
the terms on which they provide airline content for distribution. Absent the conspiracy, US
Airways and its co-conspirators would compete with each other on the content they distribute
through Sabre and other GDSs and on the booking fees that they pay the GDSs to distribute that
content. In general, the more content that an airline provides to a particular GDS, the more
attractive are the financial terms the airline pays for the GDS’s distribution services.
8. In addition, withholding content from Sabre and other GDSs, including by not
filing content publicly, will make comparison shopping more difficult, reducing transparency
and facilitating price discrimination in airline ticket pricing, resulting in decreased competition
between the airlines in providing air travel and higher prices for travelers.
These are very serious accusations indeed. In a statement, Sabre claims to believe that US Airways acted in bad faith when signing the 2011 content agreement:
“It is very disappointing to learn that US Airways did not negotiate with us in good faith in 2011, and instead intended all along to sue us as soon as they signed the agreement. Given its strategy, it appears that US Airways never had any intention of living up to its agreement.”
The full lawsuit can be viewed here.
US Airways has declined to comment to Tnooz, saying only that they are "reviewing" the lawsuit.