Court to hear DOJ lawsuit against Sabre in January

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Court to hear DOJ lawsuit against Sabre in January
Photo Credit: Billion Photos/Shutterstock

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On the other hand, Sabre has said the lawsuit is "meritless because it is based on an outdated and flawed view of the industry and Sabre’s and Farelogix's roles within it."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 Jet Airways. 

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.

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