Travelport Says Judge Dismissed Most of American Airlines’ Monopoly Claims
Travelport Ltd. won partial dismissal of an American Airlines lawsuit accusing the electronic reservations system operator of monopolizing the distribution of fare and flight data to travel agents.
Flight data distributor Sabre Holdings Corp. also won the dismissal of claims filed in the same lawsuit by the AMR Corp. (AMR)’s American, while Internet travel agency Orbitz Worldwide Inc. (OWW), which is majority owned by Travelport, won a total dismissal, according to federal court records in Fort Worth, Texas.
U.S. District Judge Terry Means rendered the sealed ruling yesterday, according to the court docket, publicly revealing only the results. Commenting separately, American and the defendants disagreed on the outcome.
“The court dismissed two of AA’s primary claims, including its claim that Sabre was ‘unreasonably restraining competition,” Nancy St. Pierre, a spokeswoman for Southlake, Texas-based Sabre, said in an e-mailed statement.
“We believe that all of American’s remaining claims are baseless,” St. Pierre said.
Michael Sperling, an American spokesman with the public relations firm Weber Shandwick, said in an e-mailed statement that the ruling allows its principal antitrust claims to move forward.
“The order permits American to raise additional antitrust claims based on newly discovered evidence, including that Sabre unlawfully organized a group boycott against American, and that Sabre and Travelport illegally conspired with each other to prevent competition from American’s direct connect technology,” Sperling said.
American sued Travelport and Orbitz in April. It said in court filings that Travelport “effectively controls the distribution of airline tickets to a large number of business travelers” and Orbitz benefits from that monopoly.
Sabre, the largest U.S.-based global fare data distribution system, was added as a defendant in the suit in June.
The case is part of a dispute brought on by Fort Worth- based American’s move to provide information directly to travel agents rather than going through data providers such as Travelport. American accused the closely held, Atlanta-based company of improperly dropping the carrier’s fare and flight data in response.
Orbitz, the third-biggest U.S. online travel agency, and Travelport asked Means in June to dismiss claims against them, followed in July by Sabre.
Sabre, once owned by AMR and now owned by private-equity firms TPG Capital and Silver Lake Management LLC, is the parent of online travel agent Travelocity.com.
The companies are also engaged in state litigation in Texas. Travelport has sued American in Illinois state court in Chicago.
“They believe they are right,” Hunter Keay, a Wolfe Trahan & Co. analyst in New York, said of American. “I don’t see them backing down from this one. There are a lot of very smart people out there who believe the GDS’s engage in monopolistic practices. This is one individual’s opinion, the district judge’s, that they don’t.”
“This could be very transformational,” Keay said of American’s effort to change the way airlines and distribution companies work together. “Distribution costs are a major expense for this industry. A favorable ruling, in and of itself, could have a major ripple effect for the industry.”
Keay rates AMR “underperform.”
Means rejected American’s claims of monopoly, conspiracy and restraint of trade and also threw out a claim that Travelport violated Texas state law, Travelport said today in a regulatory filing. The judge let stand AMR’s claim that Travelport monopolizes access to its subscriber base, according to the filing.
“Travelport remains confident that, after analyzing the facts, the court will find this claim as meritless as AA’s other claims,” Jill Brenner, a company spokeswoman, said today in an e-mailed statement.
“With the dismissal of American’s existing antitrust claims, we would prefer that our focus is a new agreement with American that reflects the strong relationship we have had for the past 10 years as an important marketing and distribution partner,” Chris Chiames, a spokesman for Chicago-based Orbitz said in an e-mailed statement.
According to the court docket, Means granted American’s request to revise its complaint for a second time.
The case is American Airlines Inc. v. Travelport Ltd., 11-cv-00244, U.S. District Court, Northern District of Texas (Fort Worth).