Sabre and the Department of Justice will go to court in
January 2020 over Sabre's planned acquisition of Farelogix, Sabre CEO Sean
Menke said Thursday.
In a lawsuit, the DOJ said
the acquisition is "a dominant firm's attempt to eliminate a disruptive
competitor after years of trying to stamp it out."
On the other hand, Sabre has said
the lawsuit is "meritless because it is
based on an outdated and flawed view of the industry and Sabre’s and Farelogix's
roles within it."
Menke reiterated that position during the company's third-quarter
earnings call on Thursday. While the DOJ claims Sabre and Farelogix are
competitors, "that claim misstates Farelogix's role in the industry," Menke
said. He believes combining the two companies will give airlines more
flexibility to create personalized offers.
"We are confident that we will succeed in court and that the
transaction will ultimately be completed," Menke said.
Sabre has extended the termination date of its Farelogix
acquisition agreement to April 30, 2020, in light of the lawsuit.
In the third quarter, Sabre reported a decrease in net
income from $73 million to $63.8 million. The decline was largely attributed to
increased technology expenses.
Revenue increased 1.4% to $984.2 million. Travel Network
revenue increased 1.5% to $711 million.
Bookings in North America, Sabre's largest market, were up
5.9%. That offset global declines for a total increase of 0.8%. Declines in
other regions were attributed to macroeconmic and geopolitical factors, channel
shift driven by legacy European carriers and the insolvency of Indian carrier
Menke said Sabre expects to invest more than $1 billion in
technology in 2019. One of its biggest projects has been cloud migration. To
date, nearly 60% of Sabre's "total compute footprint" is in the cloud.