AA/FareChase Suit - Sabre Joins Suit against AA


Aug 20, 2002
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American/FareChase hearing postponed
By Andrea Ahles
Star-Telegram Staff Writer
FORT WORTH - After three days of testimony, a judge temporarily adjourned a hearing on whether he should grant American Airlines a temporary injunction that would prevent a New York company from selling its software to travel agents.
The software, created by FareChase, would give travel agents access to airlines'' discounted fares that are currently only available on airlines'' Web sites, like AA.com.
Because state District Judge Don Cosby has another trial starting Tuesday, the hearing won''t resume until March 18.
American filed suit against FareChase in July, charging the company was illegally taking American''s property _ in this case, airline ticket prices _ and reselling it to third parties. Southlake-based Sabre Holdings had planned to distribute FareChase''s software to its travel agency network and has joined FareChase in court.
The Fort Worth-based airline had asked the court for a temporary injunction until the case is tried in court. The temporary injunction hearing began last Wednesday, but, after two days of testimony last week and more court proceedings on Monday, only American had presented all of its evidence and witnesses.
When the hearing resumes in March, FareChase will continue with its presentation to the judge.
While FareChase is disappointed that it has not yet had a chance to present its case fully, FareChase believes that American Airlines has failed to prove it is entitled to a temporary injunction, said Morgan Tovey, attorney for FareChase.
Sabre attorney R.H. Wallace said his client appreciated Cosby''s attentiveness, as well as calling his staff in on a state holiday to try to complete the hearing. Sabre does not comment on pending litigation,
American also expressed disappointment that the judge was unable to rule on the injunction.
Our goal remains to get the hearing decided as soon as possible, said Tim Kincaid, an American spokesman, adding that American feels it presented a good case.
During opening statements, Paul Yetter, attorney representing American, argued the case was simply about American''s personal property and the company''s right to protect it. The airline is trying to grow its Web site and views AA.com as an opportunity to talk with its customers.
Every time FareChase software drills into AA.com to book the ticket, American Airlines has lost the chance to get a new customer for AA.com, Yetter said.
American also says it is trying to lower its distribution costs, which currently are $400 million a year, by encouraging customers to buy tickets on AA.com.
Currently, about two-thirds of American''s tickets are sold through travel agents. With those tickets, American has to pay booking fees to companies like Sabre, which operate large reservation systems. American does not pay those fees when a ticket is purchased on AA.com.
Travel agents are currently unable to view or purchase Web fares through reservation systems like Sabre. American says it will make Web fares available to travel agents only if they sign a five-year contract to pay American''s booking fees through the airline''s EveryFare program.
Tovey argued FareChase''s software accesses information that is widely available.
(Web fares are) not proprietary because (American Airlines) posts it on the Internet every day, Tovey said in his opening statement.
Tovey argued that when a travel agent uses FareChase''s software to book a ticket on AA.com, American does not pay any booking fees or commissions to any third-parties. In essence, the FareChase software helps American sell more tickets, he said.
Although American has to prove to the court it is harmed by FareChase and needs the temporary injunction, Tovey said a ruling in American''s favor would be detrimental to FareChase.
If an injunction is issued, let''s be frank. That will be the end of the case, Tovey said. FareChase will be out of business.
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