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Airline wins big payout in long-running battle with GDS

December 23, 2016 Headline News No Comments Email Email

In what may prove a landmark decision, one of the world’s largest airlines has won a long-running legal battle against a global distribution system (GDS), largely on the grounds that the booking network was charging excessive fees.

American Airlines won about USD 15.3 million in its antitrust lawsuit against Sabre, which accused the GDS of charging grossly inflated booking fees and of damaging competition.

American Airlines had been seeking up to USD 73 million. A federal jury in New York awarded nearly USD 5.1 million but the provisions of US antitrust law treble the sum automatically. The jury rejected a separate claim that Sabre colluded with its competitors to stop competing with each other.http://www.thavornpalmbeach.com/phuket-luxury-holiday-package/

In an issued statement following the judgement, Sabre said it still believed it had operated “fairly and lawfully”. It would continue the legal action, seeking to have the verdict set aside and, if unsuccessful, would pursue an appeal.

It is just over a year since a judge cleared the way for US Airways (a brand that no longer exists, incidentally) to seek about USD 210 million in damages from Sabre over allegedly inflated booking fees.

Like other GDS systems, Sabre collects revenue from airlines to display flights for booking. US Airways had accused Sabre of inflating its fees, suppressing competition and making it more difficult for travel agents and others to use cheaper alternative ways of booking seats.

It’s a strange historical irony, because American Airlines was the creator of Sabre. The history of the two companies goes back a long way. In 1953, president of American Airlines, C.R. Smith, met Blair Smith, an IBM salesman, on a flight and developed the Sabre (Semi-Automatic Business Research Environment) concept.

Consequently, American Airlines founded Sabre Corporation in 1960, the year John F. Kennedy was elected US President. Sabre Corporation installed the first Sabre reservation system in Briarcliff Manor, New York that year. The system consisted of two IBM 7090 mainframe computers which processed 84,000 calls per day. That was considered revolutionary at the time and is still pretty impressive today.

Written by Peter Needham

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