American Airlines Wins Major Ruling Amid Saber Antitrust Case

An antitrust legal dispute between American Airlines (American) and Saber Corporation, now in its second decade, has taken another turn after a March 24 ruling rejected Saber’s attempt to have the lawsuit dismissed.

The dispute, dating back to 2011, was originally between US Airways and Sabre, but following its merger with US Airways in 2013, American was happy to continue the battle. Ironically it was American who developed the Saber reservations system with IBM and owned the company until 2000.

American Airlines A300

American Airlines is continuing to fight reservations giant Saber about issues relating to US Airways more than a decade ago. Photo: Getty Images

Saber, which stands for Semi-Automated Business Research Environment, was developed to automate American’s manual booking processes, with the system first going online in 1960. Both US Airways and American had their own battles with Saber over competition and distribution issues, its charges and the way it displayed competing airline offers to travel agents.

In the case ruled on last week, the original claim was for $317 to $482 million, which would have been trebled if successful, being the amount US Airways claimed to have lost in overcharges and profit from Sabre’s allegedly illegal conduct from April 2007 to March 2014 .

American Airlines slammed Saber as being a detriment to airline customers

However, in 2015 a judge ruled that as US Airways was now part of American Airlines Group, it could only pursue damages claims covering from February 23, 2011, to October 30, 2012, when Saber and American settled similar litigation.

After that hearing American spokesperson Matt Miller said,

“Sabre’s actions have stymied competition, limited choice and raised airline costs, all to the detriment of customers.”

American Airlines Getty

With more than 165 million passengers in 2021, American Airlines carried more than any other US airline. Photo: Getty Images

The action last week was in response to a hearing in 2016 when the jury found that Saber had violated antitrust law in the 2011 contract with US Airways. The jury awarded US Airways around $5.1 million, which by federal law was trebled to $15.3 million.

While American was quite happy after that trial, Saber said it continued to believe it had operated fairly and lawfully and it would seek to have the verdict set aside and if unsuccessful pursue an appeal.

Saber followed through with an appeal and in September 2019 its appeal was upheld, with the Court of Appeals ‘vacating’ the jury verdict, voiding the damages and remanding the proceedings for a new trial.

Heading back to court after the latest courtroom twist

So, after successfully enriching the pockets of many lawyers over the last decade, in March the two parties squared off again in the US District Court in New York, with Judge Loran G. Schofield denying the bid by Saber to have the proceedings dismissed.

This time, no one from Saber or American wanted to say much after the ruling and the stage is set for them to line up for a new hearing, at a date to be fixed. American can again ask the jury to award lost profit and overcharge and to rule on a broader monopolistic behavior claim relating to Saber’s marketplace activities.

Court documents show that the judge ruled in favor of Sabre’s request to exclude any damages arising out of the 2006 contract, ie., those incurred before the 2011 Contract became effective on February 23, 2011.

It’s hard to work out what, if anything, all this means for aviation and the general public but it’s easy to surmise this type of animus was somehow a driver for airlines, via IATA, setting up their New Distribution Capability platform.

Perhaps NDC may benefit passengers, so some good may come out of this lawyer’s picnic after all?


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