American Airlines received a Civil Investigative Demand (CID) from the Antitrust Division of the US Department of Justice last week.

Published: 23 May 2011

American Airlines received a Civil Investigative Demand (CID) from the Antitrust Division of the US Department of Justice last week.

According to an official statement released by the airline, the CID states that the Department of Justice is investigating whether conduct by the global distribution systems (GDSs) violated the US antitrust laws. The CID further requests that American provide information relevant to that investigation.

“American welcomes this investigation by the Department of Justice and intends to cooperate fully,” stated the airline.

Separately, American recently filed a federal antitrust complaint against GDS company Travelport, which remains pending in federal court for the Northern District of Texas.

Referring to barriers to entry, American says since 2004, “at least three companies, ITA, G2 Switchworks, and Farelogix, have attempted to launch a new GDS, and all have failed”. There has been no successful entry of a new GDS in the US in over 25 years. Travelport’s anticompetitive conduct and agreements have reinforced these barriers to entry by rival GDSs, according to the airline.

For its part, in recent years, American has developed an alternative method of providing airline booking services to travel agents—called AA Direct Connect. This according to American is less costly technology than the technology that the GDSs use. AA Direct Connect allows American to provide its own flight, fare and other ticketing information directly to travel agencies and compensate them directly for any bookings they make.

According to American, Travelport recognises that AA Direct Connect poses a significant competitive threat to its power to charge supra-competitive booking fees and its ability to impede technological investment and change.

For its part, online travel company Orbitz Worldwide issued a statement last month in response to a lawsuit filed in Texas by American Airlines against Travelport and Orbitz: “American Airlines’ baseless claims against Orbitz are the latest in a series of tactics to force Orbitz to adopt an airline ticket distribution model that limits consumer choice and inhibits competition.”

In December 2010, American had pulled listings from Orbitz.

Last month, American Airlines and Expedia announced a memorandum of understanding (MoU) that allowed the companies to resume doing business together.

American also sued Sabre, but the two have put the lawsuit on hold until June while they attempt to negotiate a new business agreement.