Sabre Will Challenge DOJ Lawsuit Over Farelogix Acquisition
Bruce Parkinson, Open Jaw
Sabre Corporation will challenge the lawsuit filed by the U.S. Department of Justice (DOJ) seeking to block the company’s planned acquisition of Farelogix, Inc.
Sabre says Farelogix, an airline technology company whose New Distribution Capability (NDC) technology is used by a number of airlines around the world, will bring capabilities that will accelerate the delivery of the industry’s first end-to-end NDC-enabled solution for the retailing, distribution and fulfillment of travel.
“Sabre is confident of the pro-competitive nature of this transaction, that it will succeed in court, and that the transaction will ultimately be completed,” the company says in a statement.
“Over the past two years, Sabre has embarked upon a strategy with an entirely new executive management team focused on evolving the underlying technology of the travel ecosystem we support. To meet travellers’ changing expectations while increasing profitability, airlines need a technology partner that is ready to deliver tomorrow’s technological solutions today,” said Sean Menke, Sabre President and CEO.
Sabre says the DOJ’s contention that Sabre and Farelogix compete head to head for airline bookings in the United States misstates Farelogix’s role “and reflect a fundamental misunderstanding of the industry.”
“Sabre and Farelogix offer complementary services, and this transaction is the continuation of an already successful collaboration between the two companies,” Sabre says.
“The airline technology sector is highly competitive, with many companies – even airlines themselves – competing to deliver next-gen retailing solutions. Sabre looks forward to showing the court how dynamic this industry is and having airlines and travel agencies explain how the industry actually works.”
In the original acquisition agreement, Sabre committed to its airline customers and to the DOJ that for a period of time after the transaction, it will continue to offer Farelogix products at the same prices available today or lower, and to support and invest in those products at the same level or higher. In addition, Sabre has committed to offer to extend any existing Sabre GDS or Farelogix Open Connect contracts on the same terms, including price, for a period of at least three years.
“These commitments underscore that Sabre’s goal in acquiring Farelogix is to strengthen our ability to provide our airline and agency customers with the next-generation retailing, distribution, and fulfillment products and services they need,” said Menke.
Sabre and Farelogix have extended the termination date of their acquisition agreement to April 30, 2020, allowing time to resolve the challenge by the DOJ.
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.