Feds file suit in Delaware in effort to stop travel tech systems merger

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The Department of Justice filed a civil antitrust lawsuit in Delaware seeking to block Sabre Corporation’s $360 million acquisition of Farelogix, Inc.

Both companies are incorporated in Delaware.

Sabre indicated it will fight the action by the Justice Department.

  The Department said that Sabre and Farelogix compete head-to-head to provide booking services to airlines with a merger reducing competition.

The Antitrust Division’s lawsuit alleges that the transaction would allow Sabre, the largest booking services provider in the United States, to eliminate a disruptive competitor.

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“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,” said assistant attorney general Makan Delrahim of the Justice Department’s Antitrust Division.  “If allowed to proceed, the acquisition would likely result in higher prices, reduced quality, and less innovation for airlines and, ultimately, traveling American consumers.”

According to the complaint, Sabre is the dominant provider of booking services in the United States with over 50 percent of airline bookings through travel agencies.

Sabre  recently added discount carrier Spirit to its roster.  

As alleged in the complaint, Farelogix has injected competition and innovation into stagnant booking services markets. 

According to the complaint, filed in the U.S. District Court in the District of Delaware, Sabre executives have acknowledged that acquiring Farelogix would eliminate a competitive threat and further entrench Sabre in booking services.

According to a release, when Sabre announced its intention to buy Farelogix, Sabre’s chief sales officer texted a colleague that one major U.S. airline would “hate” it.  The colleague replied, “Why, because it entrenches us more?”  Similarly, a Farelogix executive observed that buying the company would allow Sabre to “tak out a strong competitor vs. continued competition and price pressure.”

Sabre Corp. is a Delaware corporation headquartered in Southlake, Texas.  Sabre operates the largest global distribution system in the United States.  Sabre’s 2018 revenues were approximately $3.9 billion.

Farelogix, Inc. is a Delaware corporation headquartered in Miami, FL.  

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