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The US Department of Justice (DOJ) has filed an antitrust lawsuit in an attempt to block Sabre Corporation’s US$360 million acquisition of Farelogix.
In the lawsuit, the department’s antitrust division claims the two companies “compete head-to-head” to provide booking services for airlines. It says the acquisition would “eliminate competition that has substantially benefitted airlines and consumers”.
Commenting on the move, assistant attorney general Makan Delrahim said: “Sabre’s proposed acquisition of Farelogix is a dominant firm’s attempt to take out a disruptive competitor that has been an important source of competition and innovation. If allowed to proceed, the acquisition would likely result in higher prices, reduced quality and less innovation for airlines and, ultimately, travelling American consumers.”
Sabre had tried to push the acquisition through this month, giving the DOJ a deadline to file a complaint, but the department lodged its lawsuit yesterday in a civil court.
The company has said it will challenge the lawsuit, claiming the DOJ’s claims “lack a basis in reality and reflect a fundamental misunderstanding of the industry”, specifically of Farelogix’s role.
In a statement, Sabre said: “Sabre and Farelogix offer complementary services, and this transaction is the continuation of an already successful collaboration between the two companies.”
CEO Sean Menke said: “Together, Sabre and Farelogix will drive faster innovation in the dynamic, highly competitive airline technology space, helping airlines accelerate their growth and profitability while better serving travellers. We look forward to closing this transaction and to delivering the benefits it will enable for our airline and agency customers, corporations and travellers.”
Sabre has extended the termination date of the acquisition agreement to 30 April 2020, which will allow time for the challenge to be resolved.