Saber’s Farelogix Acquisition Raises Eyebrows among British Authorities
According to Breaking Travel News, the government body launched an in-depth investigation into the US$360 million deal in September and has now suggested it could result in less innovation, higher fees and more limited choice of supplier for airlines. As a result, UK passengers would be worse off, the CMA said.
The provisional finding state that the continued independence of Farelogix will likely motivate Sabre to innovate further, giving airlines more choices in connecting to travel agents that will allow them to sell tickets and extra products through travel agents in more innovative ways.
The expected innovations will further benefit passengers booking by providing them with more options to customise their travel experience.
The online newspaper points out that among other products and services, Sabre and Farelogix supply software solutions which help airlines sell flights via travel agents including those that operate online.
“They do this by providing IT services that assist airlines in managing retail offers including information about in-flight add-ons to tickets such as seats with extra leg room, Wi-Fi and meals. Additionally, Sabre and Farelogix offer solutions to help airlines connect with passengers via travel agents,” Breaking Travel News says.
In responding to passenger demand, airlines want passengers booking via travel agents to have more choice over their flight experience by being able to select, for example, specific meals or seats with extra leg room.
Farelogix has developed technology that allows airlines to offer this choice to passengers. Sabre does not currently offer this new technology but is investing in developing it.
However, the CMA is concerned that if Sabre buys Farelogix it will not have the incentive to develop the technology itself and airlines, and ultimately their passengers, will lose out as the companies will not be competing with each other to provide a better product.
The CMA is consulting on the provisional findings and views are invited by February 28th. Its current view is that blocking the merger may be the only way of addressing these competition concerns.