Travel Industry Merger Under Fire
A Politicized Effort to Block Progress?
American Express Global Business Travel (Amex GBT) has responded to the US Department of Justice’s lawsuit aimed at blocking its proposed merger with Carlson Wagonlit Travel (CWT). Amex GBT characterizes the lawsuit as a “blatant politicized effort” that fails to acknowledge the significant changes in the competitive landscape of the travel industry.
A Cherry-Picked Picture of the Industry
According to Amex GBT, the government’s complaint presents an inaccurate picture of the current industry, relying on cherry-picked facts, isolated examples, and outdated statements. The company argues that the lawsuit was filed in the final days of the Biden administration, despite knowing that the transaction would not close before March 2025. This, Amex GBT claims, is a clear indication of political motivation.
A Dramatically Changed Market
The travel management company points out that the business travel market has undergone significant changes since the pandemic. Technology-led corporate travel agencies, such as Navan, Booking Holdings’ Kayak for Business, and Spotnana, have made substantial strides. These companies, along with traditional agencies, have won significant contracts from Amex GBT, demonstrating the robust competition in the market.
CWT’s Weakened Condition
Amex GBT also highlights CWT’s weakened condition in recent years, having filed for bankruptcy in 2021 and recapitalized later. This, the company argues, is a crucial factor in understanding the competitive landscape.
Context Matters
Amex GBT claims that the Justice Department presented some arguments without proper context. For instance, an email excerpt from CEO Paul Abbott was taken out of context, allegedly showing lip service to the company’s use of IATA’s New Distribution Capability. In reality, Amex GBT states that nearly 50% of American Airlines transactions it handled used NDC, demonstrating its commitment to innovation and leadership.
A Procompetitive Merger
Amex GBT argues that a merger with CWT would be procompetitive, greatly benefiting customers. The company believes that the benefits of the merger would far outweigh any alleged anticompetitive effects.
Industry Insights
Chris Dane, president of corporate travel alliance Hickory Global Partners, disagrees with Amex GBT’s assessment. He believes that the Department of Justice and the UK’s Competition and Markets Authority have come to the correct conclusion, and that the merger would only benefit Amex GBT and CWT, not vendors, travelers, or corporate clients.
The Road Ahead
As the lawsuit makes its way through the Southern District of New York, all parties await a ruling on the merger by the UK’s Competition and Markets Authority. The outcome of this lawsuit remains uncertain, with potential implications for the travel industry as a whole.
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