Mark Pestronk
Mark Pestronk

Q: It surprised me that US Airways won its antitrust suit against Sabre a few weeks ago. The jury awarded US Airways $5 million, which seems relatively little compared with the expense of five years of litigation by teams of lawyers and expert witnesses. Why do you think US Airways won, and how did the jury come up with that figure?

A: After the jury announced its verdict, the judge instructed the jurists not to discuss their reasoning with anybody, so we will never know exactly why the carrier won.

American, which is the successor to US Airways' claims, had asked the jury for $44 million, but no one know knows why it decided to award only 11% of that.

Based on my review of the judge's rulings on numerous pretrial motions seeking to limit what the jury would hear, I have two theories that might help explain why Sabre lost.

First and foremost, the judge let in too much extraneous, confusing and distracting testimony and other evidence that had absolutely nothing to do with US Airways' claims that went to the jury but nevertheless colored the case.

After the majority of its claims were dismissed by the judge over the last few years as implausible, only two claims remained: that the 2011 US Airways-Sabre agreement had four clauses that unreasonably restrained trade, and that Sabre conspired with Travelport and Amadeus.

The jury said "no" to the alleged conspiracy, so that means that the verdict was only about the four related clauses in the US Airways-Sabre agreement: the full-content requirement, the parity clause, the no-surcharge clause and the clause restricting direct connections.

Even though the jury was instructed to focus on the effect of those four clauses, the judge had let in (over Sabre's objections) a great deal of material about the nature of the GDS vendor's agreements with travel agencies.

Since those kinds of agreements existed long before the four clauses at issue in the case, the carrier clearly had an ulterior motive in introducing evidence about them.

US Airways' position was that such agreements were "contrary to the laws of economics," that incentives were "kickbacks" and "bribes" and that such contracts contain "penalties" that inhibit potential conversions.

The point of that testimony was to show that Sabre was a bad actor imposing harsh terms on everyone, and I do not think Sabre succeeded in rebutting it.

The judge ruled that "Sabre's relationship with travel agents in general are a critical part of both the claims and defenses in this case.

"This evidence is also admissible to impeach travel agent witnesses, whom Sabre has represented it may call to testify about the purported pro-competitive benefits of some of Sabre's contract provisions."

Second, the facts that US Airways presented in support of its "kickbacks" and "penalties" arguments were far out of date.

For example, the carrier introduced a portion of the DOT's statement in its GDS rulemaking in 2004, where the DOT stated that it had proposed to outlaw "productivity pricing" because it restricted agencies from converting or using the internet.

GDS conversions and internet bookings are now commonplace, but I am not sure that the jury realized it.

Comments
JDS Travel News JDS Viewpoints JDS Africa/MI