How does Sabre work?
Sabre is the largest Global Distribution System (GDS) in the United States. Travel agents rely on GDSs like Sabre to book air travel and provide various “back-office” functions like billing and fulfillment. Sabre charges US Airways and other airlines a fee to distribute US Airways’ fares and other content to travel agents. On the other hand, Sabre typically pays travel agents for airline bookings made over the Sabre system by providing a portion of the fees it receives from airlines to travel agents.
Why did US Airways file a lawsuit against Sabre?
US Airways filed a lawsuit against Sabre in an effort to put a stop to what US Airways believes are anti-competitive practices that ultimately harm consumers and stifle the marketplace. US Airways believes that Sabre’s power over the distribution of airline tickets to travel agents has resulted in higher costs for travel, delivered through Sabre’s outdated technology. Ending Sabre’s monopolistic practices will lower prices and spur innovation.
What is US Airways seeking?
US Airways wants to be able to widely distribute its products and services to consumers in a cost-effective and efficient way, but Sabre’s conduct has made this difficult. US Airways and travelers would see enormous benefits if Sabre had to compete on a level playing field. In addition to ending Sabre’s monopolistic conduct, US Airways is also seeking to recover related monetary damages.
What does this lawsuit mean for consumers?
Consumers should still be able to book their tickets as they normally do, and US Airways expects that its tickets will continue to be offered through Sabre. Our hope is that the lawsuit will ultimately lead to changes to prevent Sabre from being able to continue its monopolistic practices involving ticket distribution. With that, consumers should benefit from the lower prices, innovation and investment in technology and expanded choices that would come with a more open ticket distribution marketplace.
Why is Sabre considered a monopoly?
Sabre is the largest GDS in the United States and exercises enormous market power over airlines, including US Airways. Over 35% of US Airways’ revenue is booked through Sabre and its affiliated travel agents. Sabre structures the distribution model so that travel agents are typically forced to rely on a single GDS to book airline tickets on behalf of their customers. Sabre imposes significant economic penalties on travel agents relating to bookings not made using Sabre. If Sabre excluded US Airways from its offerings to its travel agents, those agents could no longer book US Airways tickets through Sabre. US Airways would not be able to survive the subsequent loss of revenue. Given this disproportionate market control, US Airways has been forced to accept Sabre’s monopolistic practices.
How does Sabre work with travel agents?
Sabre creates barriers for competition by providing a portion of the fees it receives from airlines to travel agents. In order to receive the highest financial incentive, Sabre effectively forces Sabre travel agents to work with Sabre, which prevents the travel agents from working more closely and collaboratively with other distribution alternatives.