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Fort Worth, Texas - With proceedings underway here in the
state antitrust case between American Airlines and Sabre Holdings, attorneys
for both sides in opening remarks Wednesday reiterated and added detail to
their respective arguments, The Beat reported.
An AA legal representative said Sabre abused its power when
attacking the carrier's business in response to AA's push of its Direct Connect program (which does not rely on a global distribution system to connect the
airline to travel agencies). Sabre argued that AA's monopoly claims fall apart
when one examines just how good a deal the carrier got from the GDS firm, which
AA's parent company spun off a dozen years ago.
The agreement they signed in 2006, it turns out, called for
AA to pay "$2.73 on average for each domestic point of sale flight segment
booked through Sabre's GDS and $6.84 on average for each international point of
sale flight segment," according to an AA court filing. The fees were lower
than what any other major airline paid Sabre and lower than what AA paid
Sabre's rival GDSs, according to opening statements delivered at a Tarrant
County court here by Sabre outside counsel Chris Lind.
The 2006 agreement, like other airline-GDS agreements at the
time, resulted in reduced incentive payments by GDSs to travel agencies and
upward pressure on fees paid to TMCs by their corporate clients. Sabre
processes $2.5 billion of AA's annual corporate travel revenue, said AA outside
counsel Paul Yetter.
Meanwhile, Yetter argued Wednesday that efforts by Sabre to
negatively bias AA's listings in shopping displays went on longer than was
previously reported—starting in 2010, when Orbitz and Travelport first found
themselves at odds with AA over the carrier's direct program, and continuing
beyond the early 2011 order by this court for Sabre to stop as well as a
February 2011 Department of Transportation warning to distributors about
Sabre had announced to agencies its biasing move on Jan. 5,
2011. Sabre attorneys said the actions were temporary. Even still, Sabre
calculated that its biasing efforts by March 2011 had cost American $153
million in year-to-date revenue losses, Yetter claimed.
AA in the state suit is seeking damages of nearly $1 billion
from Sabre, a figure representing cost of the biasing actions and lost
distribution expense savings resulting from contract provisions that AA claimed
restricted progress of its Direct Connect program.
But Sabre argued that AA's Direct Connect program has made
little progress due to a lack of support from corporate travel agencies,
including American Express, BCD Travel, Carlson Wagonlit Travel and Expedia,
—With reporting by Jay Boehmer
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