UK blocks airline booking mergerChristian Fernsby ▼ | April 16, 2020
Following an in-depth investigation, the CMA has blocked Sabre’s proposed takeover of Farelogix.
Topics: Airline UK
Their solutions enable airlines to create add-ons to tickets sold through travel agents such as seats with extra leg room, WiFi and meals.
Additionally, the 2 companies offer services to help airlines connect with passengers via travel agents.
Following its in-depth “Phase 2” investigation, the Competition and Markets Authority (CMA) has found that Sabre’s purchase of Farelogix could result in less innovation in their services, leading to fewer new features that may be released more slowly.
Fees for certain products might also go up.
As a result, airlines, travel agents and UK passengers would be worse off.
Farelogix has developed technology that allows airlines to offer more choice to passengers who purchase tickets from travel agents by way of customising their flight experience through, for example, booking specific meals or seats with extra leg room.
Sabre does not currently offer this new technology but is investing in developing it.
If Sabre were to buy Farelogix it will be unlikely to develop the technology itself.
Airlines, and ultimately their passengers, will lose out from both this lack of innovation and the insufficient competition between the remaining companies in the market.
Additionally, Sabre is one of the main established businesses worldwide that airlines can use to connect to travel agents.
The CMA has found that Farelogix offers airlines a good alternative.
Sabre is also investing in its ability to better meet airlines’ needs.
The CMA considers that Farelogix’s continued independence will likely help motivate Sabre to innovate further, giving airlines more choices in connecting to travel agents that will allow tickets and extra products to be sold through travel agents in more innovative ways. ■