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Travelport on Wednesday shot back at American Airlines in a
Texas district court, seeking dismissal of the carrier's antitrust suit filed
last month. Travelport claimed AA is using the suit to gain negotiating
leverage in a contract dispute and rebutted allegations of antitrust activity.
"If AA's effort to dress up a commercial dispute in antitrust garb sounds
familiar, it is," according to Travelport. "Airlines have
occasionally sought to secure a negotiating advantage with GDSs by making monopolization
"The claim that Travelport has achieved an illegal
monopoly in the alleged travel agents market with a 34 percent U.S. share
should be dismissed on the pleadings," Travelport added. In response to
AA's argument that Travelport is a monopoly provider in a "relevant
product submarket," Travelport wrote that the airline contrived a market
in which Travelport would hold 100 percent share: corporate clients whose TMCs
use Travelport. "AA has managed to define a gerrymandered product market
in which no one but Travelport ever has or ever could compete," according
to Travelport's memorandum supporting its motion to dismiss AA's suit.
"Regurgitating antitrust buzz words cannot render AA's antitrust
allegations any more viable. Of course, every company is a monopolist in a
product market comprised exclusively of its own sales of its own products to
its current customers, and which excludes sales to customers that choose to buy
from the company's competitors."
Travelport suggested that AA in its suit not only used a
narrowly defined product market, but also based many of its market assumptions
on an outdated view of competition in airfare distribution.
Travelport claimed that AA's market definition "on
which its entire complaint rests" is derived from a 1996 regulatory filing
and that the airline "has lifted allegations about the state of the travel
services industry" from a 2004 Northwest Airlines complaint against Sabre.
"In short, the complaint describes a world that no
longer exists," Travelport wrote. "Over half of airline ticket sales
in the United States are now made directly from airlines rather than through a
GDS. The largest airline in the United States, Southwest, primarily built its
business through direct distribution and without significant use of GDSs. What
is missing from AA's complaint is any reliance on facts portraying these or any
other modern business realities. AA seeks instead to advance costly antitrust
litigation without plausible, specific factual allegations describing how the
industry now operates.
"Stripped of its antitrust pretext, AA's real complaint
is that the marketplace has not embraced AA's unproven and inefficient direct
connect technology and that GDSs remain highly valued by many airlines and
travel agencies," according to Travelport.
Meanwhile, American's claim that Travelport has raised
prices outside of the United State lies outside the "jurisdiction of U.S.
antitrust law," particularly when, according to Travelport, "AA has
enjoyed very significant price cuts" for U.S. bookings.
Travelport also suggested AA flexed its market muscle by
removing Orbitz's ticketing authority in December and by threatening to withdraw
from Travelport "unless Travelport provided AA with significant discounts.
"This bullying by AA has caused substantial harm to
Orbitz with Orbitz losing more than half its market capitalization since AA
pulled its ticketing authority," according to Travelport court documents.