A face-off between American Airlines, Orbitz, Expedia and Sabre is causing a row in the travel industry and calling into question the future of airline content distribution.
Tension has been building since December 2010, when American pulled its listings from online travel site Orbitz over a charge dispute. In a gesture of solidarity, Expedia delisted American content and, analysts say, the airline is now attempting to cut out the GDS systems entirely. Southlake, TX-based GDS provider Sabre fought back in January by doubling distribution fees and disfavoring American flights in its search results, saying it is “taking actions to protect its interests and those of its customers by supporting airlines who value the transparency and efficiency of the proven system we provide,” but a Fort Worth court temporarily barred the GDS provider from continuing that action.
American says its new “direct connect” business plan may not include GDS companies for their data anymore, and the carrier filed suit against GDS provider Sabre – claiming the distribution model is too costly. At press time, however, the two parties had called a truce and agreed to return their relationship to “status quo,” at least until June 1, giving them time to renegotiate distribution terms.
In its first 2011 survey for The Wire, AirPlus International queried a group of 141 travel buyers and suppliers about these distribution issues and how they may ultimately affect managed travel programs. Among all respondents, more than 88 percent were aware of the distribution issues affecting the availability of airline content through online travel agencies. Overall, more than 44 percent of respondents felt that travel management companies or booking tool providers would develop technology to accommodate direct connect strategies, such as the one currently pushed by American. Further, nearly 41 percent of respondents expected more airlines to adopt this model to reduce distribution costs and/or increase their ability to customize services. Nearly 28 percent expected other travel supplier categories to adopt similar distribution strategies.
For full survey results, please download the complimentary PDF.
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January 31st, 2011 at 13:25 PM
Position: Corporate strategy
Very interesting survey results and no clear indication seen as per today, where we are heading to!
February 1st, 2011 at 16:33 PM
Position: Travel Manager
An interesting chess match to follow. Is there a place for a GDS in the future…absolutely! If the GDS’s position is comprimised then the result is that the CTD’s/Travel Agencies will have to build and PAY for their own solutions to aggregate the data. I have a novel idea… what not keep the GDS, and re do the financial model. Reduce airline fees they charge and reduce/eliminate the Agency “incentive” checks. Net result – the airlines pay less (their ultimate goal in this war) and the GDS’s still maintain their prominent position in the process. Sure, the TMC’s/CTD’s will not be happy no longer getting that income check but it’s cheaper than developing solutions to aggregate the data. Why re-invent the wheel? Isn’t that what a GDS is?
Lets hope people keep their cool and there’s still a practical solution to this at the end of the day. AA step down off your high horse! SABRE – think outside the box!