January 7, 2015 / 6:00 PM / 4 years ago

UPDATE 2-U.S. judge narrows US Airways pricing lawsuit vs Sabre

(Adds details from Sabre filing, estimated damages reduction, American comment)

By Jonathan Stempel and Jeffrey Dastin

NEW YORK, Jan 7 (Reuters) - A federal judge has significantly cut back US Airways Inc’s $1.45 billion lawsuit accusing airfare information distributor Sabre Corp of charging inflated fees and suppressing competition in how flights were displayed.

US Airways had sought under federal antitrust law to recoup three times the $317 million to $482 million it claimed to lose in overcharges and profit from Sabre’s alleged illegal conduct over nearly seven years, from April 21, 2007 to March 31, 2014.

But in a decision on Tuesday night, U.S. District Judge Lorna Schofield in Manhattan said US Airways, now part of American Airlines Group Inc, may pursue damages claims covering only from Feb. 23, 2011 to Oct. 30, 2012, when Sabre and American settled similar litigation.

The judge said she will explain the reasons for her decision in a later opinion.

In a regulatory filing, Sabre estimated the decision reduced US Airways’ potential recovery of “single damages” by more than 75 percent. This indicated a maximum potential award of less than $362 million, after tripling.

Sabre said it will fight the remaining claims. The Southlake, Texas-based company has said it set aside $347 million for its settlement with American. AMR Corp, which was American’s parent, merged with US Airways in December 2013.

American spokesman Matt Miller said the Fort Worth, Texas-based company is pleased that US Airways may proceed toward a possible trial.

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

At issue are the fees that Sabre and other travel reservation systems collect from airlines such as US Airways to display flights for booking.

US Airways said Sabre’s anticompetitive practices impeded travel agents and others from using alternative means to book seats that could have saved money for the carrier and consumers.

It said the practices also inhibited “Choice Seats,” a 2010 US Airways program that gave better seats to passengers willing to pay extra fees.

Schofield said US Airways may seek damages for booking fee overcharges during the 20-month period in 2011 and 2012, and for Sabre’s alleged conspiracy with rivals Travelport Worldwide Ltd and Amadeus to restrain competition.

The judge rejected the carrier’s effort to recoup lost profits over Sabre’s alleged effort to thwart the Choice Seats program.

In afternoon trading on the Nasdaq, American shares dipped 0.3 percent to $52.88, and Sabre jumped 1.8 percent to $19.86.

The case is US Airways Inc v. Sabre Holdings Corp et al, U.S. District Court, Southern District of New York, No. 11-02725. (Additional reporting by Nate Raymond; Editing by Jeffrey Benkoe)

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