The UK Competition and Markets Authority (CMA) has blocked Sabre’s takeover of Farelogix in Britain despite a US court giving the acquisition the go ahead early this week.

A US District Court rejected a US Department of Justice anti-trust case against Sabre’s acquisition of new distribution capability (NDC) technology firm Farelogix on April 7.

However, the CMA found “airlines, travel agents and UK passengers would be worse off” if the deal went ahead.

Sabre announced the acquisition of Farelogix for $360 million in November 2018.

The DoJ subsequently announced an investigation and launched its lawsuit in August 2019, arguing the deal would eliminate competition in the distribution of air fares and “likely result in higher prices, reduced quality and less innovation”.

The CMA followed suit in the UK and had already completed an investigation, signalling it would block the merger in the UK pending consultation on its findings.

Sabre welcomed the DoJ ruling in a statement saying: “This federal court ruling supports our view that the Sabre-Farelogix acquisition is not anti-competitive.

However a spokesman said: “We are disappointed by the CMA’s findings, particularly in light of the US federal court’s ruling, which found Sabre’s acquisition of Farelogix is not anti-competitive and should not be prohibited.

“We are reviewing the CMA’s findings and will carefully consider our options.”

The company had previously noted the CMA had already “decided prohibition of the merger represents the only effective remedy to its competition concerns”.

Reacting on behalf of the DoJ, assistant attorney general Makan Delrahim said: “The Antitrust Division argued Sabre’s acquisition of Farelogix would extinguish a crucial constraint on Sabre’s market power and would result in higher prices and less innovation.

“We will closely review the court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of the American consumer.”

The CMA found 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.”

It noted: “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.”

The CMA added: “Sabre is one of the main established businesses worldwide that airlines can use to connect to travel agents.

“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.”

Martin Coleman, chair of the CMA inquiry group, said: “The products and services Sabre and Farelogix provide ultimately affect many passengers flying in and out of the UK.

“The two companies are helping drive technological change in this industry and we are concerned that the merger will see airlines and their UK passengers miss out on the benefits from continued innovation.

“We recognise our decision in this inquiry comes at a time of uncertainty and disruption in the global travel industry due to the COVID-19 pandemic.

“It remains important that we protect competition among businesses that provide services to airlines and the benefits such competition can bring for airlines and passengers.”

The CMA noted the DoJ remains free to appeal the US court decision, adding: “The CMA’s job is to protect competition in the UK for the benefit of UK consumers and its processes and grounds for assessment are different to those in the US.”