American Airlines wins key ruling in antitrust case against Sabre

3 minute read

A man checks in his luggage at the American Airlines check-in counter at Philadelphia International Airport in Philadelphia, Pennsylvania on December 9, 2013. REUTERS/Mark Makela

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  • The airline's complaint that the booking service overcharged will get a new trial next month
  • The 2nd Circuit had thrown out an older $15.3 mln jury verdict for American

(Reuters) - American Airlines Group Inc won a ruling in Manhattan federal court that clears a path for a new trial next month on its claims that flight-booking service Sabre Corp abused its market power and caused the airline $300 million in overcharges and lost profit.

U.S. District Judge Lorna Schofield on Thursday rejected Sabre's bid to throw out a lawsuit that first began in 2011 by then-US Airways, which merged three years later with American Airlines.

Southlake, Texas-based Sabre is the country's largest owner and operator of an electronic network through which travel agents search and book flights that are listed by the airlines. Most corporate air travel is booked through the industry's global distribution systems.

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American Airlines has accused Sabre of setting restrictive contract terms and excessive fees, which the company has denied. The airline said in court filings that more than $3.5 billion of US Airways' revenue, or 35%, was booked through Sabre from 2010 to 2012.

A representative for Sabre declined to comment on Friday. A spokesperson for American Airlines said the company was "pleased" with the court's ruling.

American Airlines in December 2016 won about $15.3 million at an earlier trial in the case that centered on the airline's claim of restrictive contract terms. Damages were limited to alleged overcharges paid by the carrier.

Applying new U.S. Supreme Court precedent, the 2nd U.S. Circuit Court of Appeals in 2019 erased that jury verdict and revived the airline's claim that Sabre was a monopolist.

Lawyers for American Airlines at the new trial can ask a jury to award lost profit and overcharge damages stemming from the company's 2011 contract with Sabre and a broader monopolization claim that focuses on Sabre's conduct in the marketplace.

While allowing the case to move to trial, Schofield's order on Thursday again limited the damages American can seek from Sabre by finding its claims related to an earlier 2006 contract between the companies are now too stale.

The case is US Airways Inc v. Sabre Holdings Corp, U.S. District Court for the Southern District of New York, No 1:11-cv-02725-LGS.

For plaintiff: Andrew Frackman, Ian Simmons and Katrina Robson of O'Melveny & Myers; and Paul Yetter of Yetter Coleman

For defendant: Patrick Fitzgerald, Steven Sunshine and Boris Bershteyn of Skadden, Arps, Slate, Meagher & Flom

Read more:

American Airlines wins $15 million in antitrust case against Sabre

U.S. judge narrows US Airways pricing lawsuit vs Sabre

(Editor's note: This report was updated with comment from American Airlines.)

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