In New York this week, a set of 21 airline passengers filed suit against Amadeus, Sabre, and Travelport, the world's three largest global distribution systems (GDSs) for airline tickets.
The class action takes up anti-trust allegations that have been made before by airlines instead of consumers. The argument is complex. (We're posting the complaint, below).
At core, it says the GDSs violate laws against monopoly and oligopoly behavior, with an alleged material harm for consumers through the inflation of airline ticket prices.
The opening paragraph of the plaintiffs' complaint alleges that they are in possession of what they describe as a:
"Sabre internal PowerPoint slide titled, 'Why do airlines distribute through Sabre?'"
A reason given on the slide is, allegedly:
“Extortion plus bribery works.”
At this stage in the legal process, the exhibit hasn't been made public, nor has its authenticity been demonstrated, nor has its context been made clear.
The plaintiffs also claim to have access to internal GDS documentation to serve to prove that the GDSs have an inferior product to what airlines could otherwise create or find on their own in the marketplace.
One such exhibit claims to be a quotation from one of Sabre's executives in its airline distribution division, who allegedly uttered:
"We have failed to deliver squat in the two plus years [Air Canada] has implemented their technology. Their web is really good and [we] can’t even develop and implement fare families, and graphical hover over. ... Seems to me that we are not built for speed, agility and innovation. That seems like our problem, no?"
GDS responses
A spokesperson for Sabre said:
"We are aware of the lawsuit. We don't have any comment regarding the lawsuit other than we intend to vigorously defend against the claims."
Among other things, the lawsuit targets the "full-content agreements" that the GDSs allegedly require airlines to sign and that are allegedly in violation of anti-competitve regulation.
Similarly, a spokesperson for Amadeus said:
"These allegations are entirely without merit and we will defend this action vigorously. Global distribution systems have been instrumental in facilitating an era of unprecedented mass air travel, delivering value both to the airline industry and to the traveler.
Our technology serves a global network of travel agencies, management companies and online properties that provides airlines and other travel providers with a global market place at a cost effective price. The GDS has ensured that travelers across the world have access to the choice and transparency they demand."
A spokesperson for Travelport said:
"Travelport denies the allegations in the complaint and will vigorously defend itself against these claims."
The GDSs have faced similar accusations for years. But the most prominent of those lawsuits were from airlines, not passengers. Those cases have settled. The airlines have continued to enter into contracts with the GDSs.
Related to those lawsuits, one of the statements made in the complaint is that American Airlines settled with Sabre for $347 million. That number is above the $280 million previously estimated by Tnooz. Neither figure has been confirmed.
US Airways' similar suit against Sabre in particular has been given bench trial dates in October in New York as well.
Meanwhile, this week's new class-action lawsuit takes swipes at many players in the industry.
For instance, it attacks a report released in May by the Travel Technology Association (TTA), a travel technology trade group whose members include the three defendants.
The complaint alleges that the TTA report:
"cloaked their [the GDSs'] conspiratorial Full Content Agreements with the pretext of actually protecting competition."
The report being criticized was widely picked up in the general news media.
Tnooz has reported on many class-action lawsuits that have come to nought. That's a pattern that holds true for corporations in a variety of industries.
This group of airline passengers is represented by class-action law firms Heins Mills & Olson and
Lite DePalma Greenberg, along with other counsel. These firms' websites detail the antitrust class-actions that they've had success with.
The putative class is seeking damages, attorneys' fees, and an injunction against the GDSs. No dollar figures were specified in the complaint.
Class Action: Gordon, et al. vs. Amadeus et. al.