Sabre embroils IATA’s NDC in counterclaim to US Airways lawsuit

Calls distribution initiative ‘an agreement among competitors’ to withhold content

Sabre called IATA’s New Distribution Capability “an agreement among the airlines to withhold content by not publicly filing their content.”

In a counterclaim to the long-dormant antitrust lawsuit filed by US Airways, Sabre said, “IATA mistakenly believed that antitrust violations done under the auspices of a trade association would go undetected or unchallenged.”

It said IATA’s Resolution 787, which approved the NDC initiative, is “nothing but agreements among competitors, with no privileged status under the antitrust laws.”

The counterclaim also accused US Airways of conspiring with other airlines and with Farelogix to “flip” the distribution model.Sabre logo

Sabre said the airlines’ goal was reverse the flow of money: Carriers would no longer pay GDS companies for distribution services. Instead, the airlines would require travel agents to pay airlines for access to content and to make bookings, Sabre said.

Sabre said US Airways and its co-conspirators communicated under the “guise” of a variety of organizations, including the Star Alliance; a group set up by Farelogix to promote the use of “newer, more efficient approaches to selling airline tickets;” Boston Consulting Group’s Consortium, in which US Airways, American Airlines, Delta Air Lines and United Airlines participated, and IATA.

It said that although IATA’s NDC is “ostensibly a technical standard, in fact NDC is an agreement among the airlines to withhold content by not publicly filing their content.”

In addition, Sabre said, “IATA has insisted that NDC does not need to be backward compatible with existing distribution standards, meaning that GDSs will not be able to aggregate content that will come through NDC with content that will come from other sources.”

Sabre said the airlines committed to one another to use the NDC standard to distribute “enhanced content” and to not file that content publicly. Instead, the airlines would decide what content to offer in response to specific requests from a specific travel agent or traveler, it said.

IATA logoIATA has disputed that characterization, saying airlines that adopt NDC still can accept anonymous requests.

Sabre also said that “through NDC, the airlines agreed that they would obtain sensitive, highly personal information from travelers, including age, marital status, national origin, place of residence, and shopping and purchase history. Only after getting this information would an airline decide what offers to make to the travelers.”

According to the counterclaim, “This information makes it easier for airlines to increase ticket prices by price discriminating against specific travelers based on the personal characteristics of that traveler. Achieving these goals could only be accomplished by agreeing on the terms by which the airlines would deal with GDSs.

In its counterclaim, Sabre also said US Airways, which signed a full-content agreement with Sabre in March 2011, used its negotiations over the agreement to gather evidence “for the sole purpose of suing Sabre after the contract was signed.”

The lawsuit originally was filed in April 2011, in U.S. District Court, Southern District Court of New York, just 10 days after American Airlines sued Travelport for antitrust violations in a Texas federal court. Sabre was added as a defendant to that lawsuit two months later.

The two lawsuits were similar: Both accused the GDS companies of monopolizing and controlling access to “relevant submarkets” – their agency subscribers, who in turn were the conduits to the business travel market.

But Judge Miriam Goldberg Cedarbaum of the New York court threw out US Airways’ submarket argument and told the carrier to restate its other claims against Sabre.

The carrier did so, but the lawsuit was stayed for several months while Sabre and American fought it out in Texas. They settled their case at the end of October. American’s lawsuit against Travelport is still alive.

Meanwhile, American Airlines’ fourth-quarter earnings report may offer a clue to the terms of its settlement with Sabre. It states that “the fourth-quarter results include a $280 million benefit from settlement of a commercial dispute.”

Read about Sabre’s new defense in US Airways’ antitrust lawsuit in the Jan. 7 issue of TTU.

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