American Airlines, Sabre Tentatively Settle $139M Dispute
American Airlines (AA), headquartered at Dallas/Fort Worth International Airport, and Sabre Airline Solutions have reached a tentative settlement in their long-standing legal battle over USD139 million in legal fees. This development was confirmed in a court filing on November 16, marking a significant resolution to the 13-year antitrust dispute between the two aviation giants.
The settlement comes as a relief to both parties involved in the case of US Airways, Inc., for American Airlines, Inc. as Successor and Real Party in Interest v. Sabre Holdings Corp., et al. (case no:1:11-cv-02725-LGS), which has been under scrutiny in the US District Court for the Southern District of New York. According to the joint statement from the counsels representing both American Airlines and Sabre, the agreement-in-principle aims to conclude the protracted legal confrontation that has spanned over a decade.
While the specific terms of the settlement remain undisclosed, the agreement, if approved by the court, will effectively end the dispute over the USD139 million in legal fees that American Airlines has sought from Sabre. This amount pertains to the costs incurred by American Airlines during the litigation process, which followed the original antitrust lawsuit filed by US Airways against Sabre.
The antitrust case initially revolved around allegations that Sabre had engaged in anti-competitive practices by preventing travel agents and other entities from using less expensive alternatives for booking airline seats. US Airways accused Sabre of maintaining an undue monopoly power through restrictive distribution agreements, thereby limiting competition and inflating costs for the airline.
In the May 2022 trial, jurors concluded that Sabre had indeed harmed US Airways by intentionally maintaining its monopoly power. However, they ruled that Sabre’s actions did not sufficiently constrain trade to warrant more substantial damages, resulting in a nominal award of USD1 to the airline. Dissatisfied with this outcome, American Airlines pursued further legal action to recover the USD139 million in legal fees associated with the case.
Earlier this year, US District Judge Lorna Schofield denied American Airlines’ initial attempt to claim these costs, suggesting that the parties should attempt to settle the matter independently. Despite efforts to negotiate a settlement, the two companies were unable to reach an agreement until recently. During an October hearing, American Airlines’ counsel indicated that settlement discussions had stalled, leading Sabre to prepare a response for the November 26 hearing. Both parties have since requested an adjournment of the hearing to December 6 to finalize the settlement terms.
The tentative settlement underscores the complexities and financial burdens that long-term legal disputes can impose on major airlines. For American Airlines, resolving this issue allows the company to focus on its core operations and strategic initiatives without the lingering uncertainty of ongoing litigation.
Sabre Airline Solutions, a key player in the aviation distribution systems market, provides technology solutions that help airlines manage reservations, inventory, and pricing. The resolution of this dispute is expected to stabilize the business relationship between Sabre and American Airlines, potentially paving the way for future collaborations and innovations in airline distribution technologies.
For American Airlines, the settlement not only alleviates the financial strain associated with the legal fees but also signifies the end of a contentious chapter in its corporate history. Moving forward, the airline can redirect resources towards enhancing customer experiences, expanding route networks, and investing in sustainable aviation technologies.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com