The United States Justice Department announced Tuesday it would be fighting to stop travel technology firm Sabre Corporation from purchasing Farelogix Inc.
According to Reuters.com, Sabre announced last week that it planned to close the $360 million acquisition by Wednesday if the Justice Department didn’t file a lawsuit. As a result, the paperwork was filed in U.S. District Court in Delaware, with Sabre being accused of trying to eliminate a “disruptive competitor.”
MORE Travel Technology
Travelport and Qantas for New Era of Distribution…
American Airlines, American Express and Amadeus Complete…
Travelport Offers First Phase of…
Sabre and Farelogix have now agreed to extend the termination date of the deal to April 30 to give the government’s challenge of the agreement time to play out in court.
“If allowed to proceed, the acquisition would likely result in higher prices, reduced quality and less innovation for airlines and, ultimately, traveling American consumers,” Justice Department Antitrust Division head Makan Delrahim told Reuters.
The government believes that Farelogix is an “innovative technology company” that addresses the needs of airlines and their customers, while Sabre “operated outdated technology and resisted innovation” despite providing over 50 percent of airline bookings through travel agencies.
The lawsuit claims Sabre has filed grievances with the Justice Department against Farelogix in the past due to their technological advancements, while airlines have used the recent success of Farelogix to negotiate lower fees with Sabre.
The court documents revealed Sabre had revenues of $3.9 billion and Farelogix had $42 million in revenues last year.