US Airways Sues Sabre Over Anti-Trust Laws

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US Airways said it filed a federal civil antitrust lawsuit against Sabre Holdings on Thursday alleging the global distribution system engaged in anti-competitive practices designed to limit the ways airlines can reach their customers.

US Airways, in a suit filed in U.S. District Court in New York, accused the Dallas-based GDS of imposing penalties on travel agents who book outside of the Sabre reservations network and trying to prevent agents from using "direct-connect" technology to book directly with individual carriers.

"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service providers have become more efficient, yet Sabre's conduct has enabled it to charge inflated prices with outdated technology that was developed before the internet existed," said Scott Kirby, president of US Airways, in a statement. "Lower-cost more technologically advanced alternatives and innovative fare products are being shut out by Sabre's actions."

US Airways alleged that Sabre threatened to shut off the airline from the GDS if it did not accept what US Airways considered anti-competitive restrictions that protect Sabre from direct channel competition.

Sabre called the allegations baseless and without merit.

"We intend to aggressively defend against US Airways lawsuit, pursue our own legal rights, and take appropriate action to protect consumers right to a transparent marketplace in which travelers can quickly and conveniently comparison shop among competing airlines," said Sabre spokesperson Nancy St. Pierre, in a statement.

The lawsuit comes weeks after a similar action by rival American Airlines, which filed a suit against Orbitz, the Chicago-based online travel site and its parent firm Travelport, which owns the Worldspan and Galileo GDS systems.

American accused the firms of engaging in anti-competitive actions to prevent it from connecting with travel agents and consumers using direct-connect technologies. The airline pulled its fares from the Orbitz website in December, however Travelport and Orbitz officials have denied the allegations and called American a "bully" trying to force direct connect technology on travel agencies.

Henry Harteveldt, vice president and principal analyst at Forrester Research, said that US Airways is frustrated with the cost, control and, in the airline's opinion, inadequate merchandising capabilities of GDS providers, however he added that US Airways acknowledged just weeks ago that there isn't a better distribution channel out there for reaching travel agencies.

"I don't believe that US Airways wants to be perceived as a supporter of the GDS channel, though I also don't believe they share American's aggressively negative opinion of that channel," said Harteveldt.

American had previously filed a similar suit against Sabre Holdings, but that suit was put on hold while the parties continued to talk.

American recently signed an agreement with rival online agency Expedia and Hotwire, which allows the airline to explore direct-connect bookings.

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