Remember that little spat in March when US Airways issued a press release to challenge Sabre's characterization of their new full-content agreement?
Well, all was obviously not love and kisses in the partnership as further evidenced by the antitrust lawsuit that US Airways filed today against Sabre in the Southern District Court of New York.
In a press statement about the suit, the airline says that during the negotiations for the new agreement, reached in February 2011, US Airways demanded that Sabre drop "exclusionary restrictions that protect Sabre from competition" and Sabre refused to budge and threatened "... to shut off access to US Airways..."
US Airways had no choice but to submit to Sabre's demands, the suit alleges.
“Sales by US Airways through Sabre account for over 35% of US Airways’ annual revenue," the complaint states. "Over $3.5 billionof US Airways’ revenue flows through Sabre annually. Without those sales, US Airways will not long survive.”
The airline raises issues about alleged global distribution monopoly power that American Airlines similarly pointed to in an antitrust lawsuit against Travelport and Orbitz filed a little more than a week ago.
The US Airways suit slams Sabre for allegedly anticompetitive behavior to "protect its monopoly pricing power and maintain its technologically obsolete business model," the airline says.
US Airways says it is forced to accept Sabre's "my way or the highway" approach and "monopolistic practices" because the airline wouldn't be able to survive the revenue hit if the GDS blocked its inventory from travel agents.
The airline says Sabre penalizes travel agents economically for bookings made outside of the Sabre GDS and "and has been aggressive in suppressing the ability of travel agents to book tickets directly with airlines using so-called 'direct-connections.'"
US Airways president Scott Kirby says:
The airline industry and other technology service providers have become more efficient, yet Sabre's conduct has enabled it to charge inflated prices with outdated technology that was developed before the Internet existed. Lower-cost, more technologically advanced alternatives and innovative fare products are being shut out by Sabre's actions.
The US Airlines suit also alleges that Sabre bullied the airline into signing an agreement with subsidiary Travelocity under terms that were favorable to Travelocity.
And, the airline provides more color on its dueling press release battle with Sabre in early March. The suit 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.
US Airways seeks a declaration by the court that Sabre's actions violate the Sherman Antitrust Act; a permanent injunction barring Sabre's "ongoing exclusionary conduct and unreasonable agreements;" and treble damages.
Asked to comment on the suit, Sabre spokeswoman Nancy St. Pierre said: "We are aware of US Airways’ actions today and are reviewing the details of their legal claims. We will have further comment when appropriate."
And American Airlines, which is in litigation with Sabre and sued Travelport over antitrust issues, also commented on the US Airways suit.
"While we’re not a party to the lawsuit between US Airways and Sabre, the allegations in this lawsuit are consistent with our belief that various anticompetitive practices have created a GDS market that is not competitive," said Ryan Mikolasik, a spokesman for American Airlines. "US Airways' lawsuit also shows that American does not stands alone in trying to bring new technologies to the distribution of airline products in the 21st century."