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Travelport Urges Court to Dismiss AA Antitrust ActionMay 25, 2011 By: George Dooley Travel Agent
Travelport charged that American Airlines' (AA) recent antitrust suit against Travelport was motived by the airline’s desire to improve its bargaining position with Travelport in the current round of contract negotiations. Travelport urged the court to dismiss the case and offered a sharp defense of GDS’s and their value to travel agents.
“Preliminary contract negotiations have stalled, and AA has made good on its threat to file a lawsuit such as this one if Travelport did not yield on certain commercial terms,” Travelport said. AA filed its action in the Fort Worth, Texas U.S. District Court naming Travelport and Orbitz Worldwide.
“This is not a genuine antitrust action brought by consumers suffering from excessive or artificial price increases. It is an opportunistic lawsuit brought by a large and powerful company seeking to enhance its already substantial commercial bargaining leverage,” Travelport said.
Travelport said AA’s market power was recently demonstrated when it withdrew ticketing authority for AA tickets from Orbitz.com late last year after negotiations concerning AA’s direct connect offering failed.
“This bullying by AA has caused substantial harm to Orbitz with Orbitz losing more than half its market capitalization since AA pulled its ticketing authority,” Travelport said. Travelport has an interest in Orbitz.
“Stripped of its antitrust pretext, AA’s real complaint is that the marketplace has not embraced AA’s unproven and inefficient direct connect technology and that GDSs remain highly valued by many airlines and travel agencies,” Travelport said.
“GDSs continue to offer proven, cost effective distribution services for AA and many other airlines, and compete intensely with each other on price, quality, and content to encourage both airlines and travel agents to continue using their services. GDSs also vigorously compete with other distribution channels that now account for a majority of air ticket distribution in the U.S. Contrived market definitions cannot mask these contemporary business realities. “ Travelport said. Travelport urged the court to dismiss AA’s complaint.