The U.S. Department of Justice has filed a civil antitrust lawsuit to stop Sabre Corp.'s acquisition of Farelogix. Sabre said the suit's claims show "a fundamental misunderstanding of the industry."
DOJ Antitrust Division Assistant Attorney General Makan Delrahim called the acquisition a "dominant firm's attempt to take out a disruptive competitor" that would result "in higher prices, reduced quality and less innovation for airlines and, ultimately, traveling American customers." The complaint, filed in the U.S. District Court in Delaware, cited the acrimonious history between between the two, characterizing Farelogix as a "scrappy competitor" whose existence has enabled airlines to reduce reliance on global distribution systems and in turn to negotiate lower fees with Sabre and the other GDSs.
Sabre will challenge the lawsuit, saying the DOJ's claims mischaracterize Farelogix's industry role. "Sabre and Farelogix offer complementary services, and this transaction is the continuation of an already successful collaboration between the two companies," according to Sabre. "The airline technology sector is highly competitive, with many companies—even airlines themselves—competing to deliver next-gen retailing solutions."
Sabre also reiterated its promise to continue offering Farelogix products at or below current prices "for a period of time after the transaction" and to offer extensions of any Sabre GDS or Farelogix Open Connect contracts for at least three years with the same pricing and terms.
In anticipation of the challenge, Sabre last week extended the termination date of the acquisition agreement to April 30, 2020. The company now is preparing a formal written response to the DOJ complaint.