Southlake-based Sabre Plans to Fight Justice Department's Antitrust Lawsuit

Airline technology company Sabre Corp. plans to fight an antitrust lawsuit filed Tuesday by the Justice Department over the Southlake-based company's $360 million purchase of competitor Farelogix Inc. Sabre agreed to buy Miami-based Farelogix in November, but the government's antitrust division sued to stop the merger. The government argues the deal would be harmful to competition."Sabre's proposed acquisition of Farelogix is a dominant firm's attempt to take out a disruptive competitor that has been an important source of competition and innovation," said Assistant Attorney General Makan Delrahim. "If allowed to proceed, the acquisition would likely result in higher prices, reduced quality, and less innovation for airlines and, ultimately, traveling American consumers."Both Sabre and Farelogix provide technology systems that help airlines, such as American Airlines, sell tickets to passengers. Sabre operates a "global distribution system" that allows airlines, travel agents, hotels, car rental agencies and other companies to manage inventory in real-time across the world. In a statement Tuesday, Sabre's management said the two companies don't actually compete, but offer "complementary services, and this transaction is the continuation of an already successful collaboration between the two companies."Sabre said the Justice Department's "claims lack a basis in reality and reflect a fundamental misunderstanding of the industry."But the Justice Department said Sabre is the dominant provider of booking services in the U.S. with more than a 50% market share. The Justice Department also said Sabre, for years, has operated "outdated technology and resisted competition."Sabre was a part of American Airlines until it was spun off in 2000 and once owned the Expedia and Travelocity brands. Its 2018 revenues were about $3.9 billion.The Justice Department said the growth of Farelogix has allowed airlines to negotiate lower fees with Sabre. Federal lawyers also said Farelogix has in the past complained about Sabre's attempt to "stifle competition." "Now that Farelogix has gained a foothold in booking services and is poised to grow, Sabre seeks to eliminate this scrappy competitor once and for all by acquiring it," the Justice Department said.  Continue reading...