Amadeus, Sabre Distribution Practices Under EU Inspection

The European Commission announced last week that it had launched an official investigation into distribution deals carried out by leading booking system providers Amadeus and Sabre with airlines and travel agents which may have breached EU antitrust rules.

More specifically, the EU is aiming to assess whether such agreements between players set restrictions in their terms which may restrict airlines and travel agents to seek alternative GDS suppliers, making it harder for new GDS suppliers to enter the market while increasing distribution costs for airlines, which are then passed on to the consumers.

“Our investigation into Amadeus and Sabre focuses on possible restrictions in competition in the market for airline ticket distribution services. We are concerned that such restrictions could create barriers to innovation and raise ticket distribution costs, ultimately raising ticket prices for travelers,” said EU Commissioner in charge of competition policy, Margrethe Vestager.

In response, Madrid-based Amadeus said in a statement that it “will cooperate fully and openly with the Commission in this process, to ensure that it takes into account all relevant factors, and to address all concerns the Commission may have. The process will confirm that Amadeus’ business practices are fully aligned with legal and regulatory requirements”.

On its part, US company Sabre also said it would “cooperate fully with the European Commission in this process”, and that it welcomes “the opportunity to further demonstrate to the Commission that our full content agreements and travel agency contracts are pro-competitive, resulting in the world-class content, products, and functionality that travelers value and indeed demand of Sabre”.

Amadeus noted that it had been expecting the investigation for quite some time, with Sabre stressing that it believes “full content, or parity clauses, are in the best interest of consumers and serve to provide them with comparability and transparency, enabling consumers to easily and efficiently shop and book the best flights that meet their needs”.

As leading suppliers of Global Distribution Systems (GDS), Amadeus and Sabre aggregate information about flight schedules, seat availability and ticket prices from multiple airlines, allowing in turn travel agents and travel management companies to compare airline services and reserve and issue tickets on behalf of travelers.

According to the Commission, the agreements under investigation may be breaching EU competition rules which prohibit deals between companies that “prevent, restrict or distort competition within the EU’s Single Market (Article 101 of the Treaty on the Functioning of the European Union).