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American had claimed that global distribution systems that provide fare information to travel agents had conspired with each other to protect their mutual interests, organized boycotts to punish American for supporting alternatives and used other practices that squelched competition.
A jury trial in the matter had started in state court in Texas earlier this month.
American, a unit of AMR Corp (>> AMR Corporation) that filed for Chapter 11 protection last November, will receive an undisclosed monetary payment from Sabre. The two companies renewed their distribution agreement, they said in a joint statement.
Sabre, which owns Travelocity, is one of several global distribution systems that act as pipelines to provide fare and flight information. It was once a unit of American.
The settlement requires approval by U.S. bankruptcy court.
As a result of the settlement, Sabre is no longer a defendant in American's continuing federal suit against Orbitz Worldwide (>> Orbitz Worldwide, Inc.) and airfare data provider Travelport.
The federal case is American Airlines Inc. V. Travelport Ltd et al, U.S. District Court, Northern District of Texas, No. 11-0244.
(Reporting by Karen Jacobs; Editing by Tim Dobbyn)
(This story was refiled to show that the trial was in state court in Texas, not in federal court; and adds reference to federal case in the seventh paragraph)
