American & Sabre Settle Feuds Over Booking Site

FORT WORTH (CN) - American Airlines agreed to settle federal and state lawsuits filed after travel-reservation firm Sabre Holdings displayed American's flight information and bookings.

The settlement entered Wednesday ends a Tarrant County trial where the airliner alleged that Sabre damaged it by approximately $1 billion in illegally trying to shut down the competing AA Direct Connect ticketing service.

In a joint statement, the companies announced the renewal of their current distribution agreement for an unspecified number of years. Southlake-based Sabre agrees to pay an unspecified amount of money and American will be allowed to continue development of AA Direct Connect.

Seeing American's service as a "significant competitive threat" to Sabre's Global Distribution System (GDS), Sabre "engaged in a broad and unlawful multi-part anticompetitive scheme," according to the amended federal complaint American filed last year in Fort Worth.

"Specifically, each of Sabre and Travelport has engaged in various forms of unlawful exclusionary conduct intended to significantly limit the incentive and ability of its travel agent subscribers to shift bookings among different providers of airline booking services in response to ordinary market forces," the complaint states. "In doing so, each has ensured that American and other network airlines that rely on travel agents to distribute tickets remain dependent upon Sabre and Travelport to access the critical group of travel agents that subscribe to their respective GDSs. In this way, Sabre and Travelport have obtained and maintained monopoly power over American and other network airlines."

The illegal practices included the inclusion of contract terms with airlines that limited the use of competing forms of distribution, tying-up travel agents to long-term restrictive agreements that require or give incentives their use of GDS exclusively, and retaliating against American and others that threaten Sabre's monopoly, American alleged.

Terms of the settlement and distribution agreement are subject to approval by a Manhattan bankruptcy judge overseeing American's restructuring.

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