Travelport Seeks Dismissal Of American Airlines' Antitrust Suit

Date : 05/25/2011 @ 10:03AM
Source : Dow Jones News
Stock : US Airways Grp. New US Airways Grp., Inc. (LCC)
Quote : 22.55  0.0 (0.00%) @ 2:05AM

Travelport Seeks Dismissal Of American Airlines' Antitrust Suit

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Travelport on Wednesday accused American Airlines of "bullying" tactics as the travel-services group sought the dismissal of an antitrust lawsuit brought by the third-largest U.S. carrier.

American Airlines' parent AMR Corp. (AMR) has been at the forefront of efforts to shake up the way airline tickets and other services are sold, battling Travelport--which owns three global distribution systems platforms and online ticket seller Orbitz Worldwide Inc. (OWW)--as well as Expedia Inc. (EXPE).

Travelport said in a brief filed in a Texas court that American's move was an "opportunistic" effort to give it leverage in ongoing contract renewal talks, and also called for the case to be transferred to Chicago if not dismissed.

The ticket distribution spat has caught the attention of U.S. antitrust regulators, which have launched a probe into alleged anticompetitive practices involving the intermediaries, known as GDS.

GDS leaders such as Sabre Holdings Corp. and Travelport provide travel agents with airline fares and schedules and form a crucial link with premium corporate customers. US Airways Group Inc. (LCC) is suing Sabre over alleged antitrust violations.

Travel agents still account for two-thirds of U.S. airline ticket sales and dominate the market for high-margin corporate accounts prized by carriers. The agents are fed prices and schedules by the GDS operators rather than the airlines, and receive a fee for each booking.

Some airlines want to circumvent this process by dealing directly with agents, partly to cut costs and also to segment their customer base and offer additional services.

The GDS operators contend this will reduce customer choice.

American's focus has been on Travelport, suing the company in April for damages and seeking a permanent injunction against alleged anticompetitive practices. It has announced a preliminary settlement to end a dispute with Expedia.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com

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