Following an in-depth investigation, the Competition & Markets Authority has blocked Sabre’s proposed takeover of Farelogix.
The government body argued the deal 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.
Martin Coleman, chair of the CMA inquiry group, said: “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.”
He added: “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.
“We never take decisions to block mergers…