A blow to Sabre after a victory in the U.S. on the same deal earlier this week: the travel tech giant's plan to acquire Farelogix has been ruled out by U.K.'s Competition & Markets Authority.
A statement from the regulator says the purchase could lead to “less innovation in their services, leading to fewer features that may be released more slowly.”
The CMA believes airlines, travel agents and U.K. travelers would be adversely affected as a result.
Sabre initially announced its plan to acquire Farelogix for $360 million in November 2018.
On Tuesday, Sabre won the U.S. element of the antitrust case brought by the Department of Justice last August.
The U.K. authority launched its own investigation in June 2019 and, in February this year, it said it had “provisionally found competition concerns.”
Sabre and Farelogix supply technology to help airlines sell flights and add-ons.
The CMA has said that were the acquisition to go ahead, Sabre would be unlikely to develop technology that Farelogix offers itself and that on top of the lack of innovation there would be “insufficient competition” between players in the market.
Martin Coleman, chair of the CMA inquiry group, says: “The products and services that 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 that 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.”
He adds that the “evidence of harm is clear” were the acquisition to go ahead.
While the DoJ in the U.S. may appeal the decision by the Distribution Court in Delaware to clear the deal, the CMA has said its grounds for assessment are different to those in the U.S.
Sabre has long maintained that the deal has benefits for airlines as well as the wider travel management community in terms of the ability to access ancillary elements and personalize for corporate clients.
In a statement regarding the CMA's decision, it said: "We are disappointed by the CMA's findings, particularly in light of the U.S. federal court's ruling, which found that 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."