American Airlines has taken aim at the entire GDS business in a lawsuit filed Tuesday against Travelport and Orbitz Worldwide in U.S. District Court in Fort Worth, Texas.
American contends that Travelport has used anticompetitive practices to obstruct AA’s attempts to implement its direct-connect technology. AA accuses Travelport of using its "monopoly power" to protect the status quo and charge airlines a "supracompetitive" booking fee.
Further, American said in its complaint that Travelport has thwarted the airline’s efforts to negotiate direct-connect agreements with travel agencies by "entering into long-term restrictive agreements with travel agents that give those agents a shared financial interest in maintaining the Travelport GDSs' market power [over] American and other airlines."
Although Sabre Holdings is not a named defendant in the complaint filed Tuesday, AA discussed Sabre’s "contemporaneous actions" in the document.
Sabre biased its GDS displays against American in January in a distribution dispute, an action that prompted the airline to seek a temporary restraining order from a Texas state court, which AA received.
Sabre had contractually agreed not to use display bias, said American, but Sabre "claimed that its anti-bias obligation was terminated because American publicly had marketed a direct-connect program to GDS subscribers" in violation of a provision in AA’s amended participating-carrier agreement, claimed AA.
After issuance of the temporary restraining order, American and Sabre agreed to stay litigation until June 1 and negotiate a new distribution agreement. The two parties have yet to announce a new deal.
Regarding Orbitz, AA said that Travelport’s subscriber-services agreement with Orbitz "prohibits Orbitz from entering into new direct-connect relationships with any airline and from expanding or renewing any existing direct-connect agreement with any airline, including American, that would bypass the Travelport GDS."
American accuses Travelport and Orbitz of "concerted activities intended to punish and retaliate against American for its direct-connect initiative."
In a statement responding to American’s litigation, Orbitz Worldwide said it is AA playing the role of "marketplace bully."
"Having failed to force Orbitz to adopt unproven technology that does not meet the needs of our customers, American Airlines is now resorting to groundless litigation in a desperate attempt to revive an unsuccessful strategy," Orbitz said.
The dispute over American’s direct-connect technology, which AA touts as the most effective way to sell airline tickets and ancillary charges such as baggage fees, led AA to pull its fares from Orbitz in December.
Travelport called AA's lawsuit "ludicrous and meritless."
"There are many disparaging comments about Travelport's technology which are not borne out by facts, including recent airline adoption of Travelport's merchandising capability or innovation such as the groundbreaking Travelport uAPI," Travelport said.
Travelport and Air Canada have agreed to a deal in which the airline continues GDS participation while a direct connection into Air Canada’s reservations system enables merchandising capability.
American is requesting a "permanent injunction forbidding Travelport from threatening or engaging in unlawful retaliatory conduct against American [and] other permanent injunctive relief, as the court deems appropriate, designed to create market conditions capable of dissipating Travelport’s unlawfully maintained monopoly power."
The airline also seeks triple the amount of damages "American has suffered as a result of Travelport’s illegal conduct," plus punitive damages and court costs.
American said Travelport's "retaliatory actions have misled and confused travel agents and corporate subscribers," negatively affecting ticket sales and business relationships with agents and corporate customers.