Technology At Sept. 1 deadline, GDS-fees picture cleared a bit -- or did it get foggier? By Andrew Compart and Dennis Schaal / September 11, 2006 Share 1 -- Sept. 1 has come and gone, which means many agents now live in a travel distribution world with GDS segment fees or reduced GDS incentive payments. But agents got some last-minute surprises, both good and bad, and some unanswered questions remain, particularly for agents using Amadeus. Some agency uncertainty was eliminated when Sabre and American came to terms Sept. 1 on a five-year, "full-content" distribution agreement under which the airline designated Sabre's Efficient Access Solution "a competitive distribution channel for American Airlines ticket sales." That means agents who use EAS won't have to pay the $3.50-per-segment fee.Sabre spokeswoman Kathryn Hayden said that more than 99% of Sabre-connected agencies in North America are participating in the EAS program."This agreement is good for American, good for our agency partners, and good for our customers," David Cush, American's senior vice president for global sales, said in a Sept. 1 notice to agents."American remains committed to lowering distribution costs to be competitive with those of low-cost carriers, many of whom do not participate fully in the GDS or agency channels," he continued. "Our agreement with Sabre establishes long-term cost savings to support American's commitment to the agency channel and our commitment to avoid content fragmentation."Cush said the agreement also "provides critical protection for customer data." There had been a publicly aired dispute between American and Sabre, as reported in Travel Weekly and a Business Travel Coalition white paper, about each party's policies regarding the use of personal data.The clash of the titans endsCush said that "while negotiations between American and Sabre became much more public than either company would have liked, the tensions were illustrative of the tremendous changes that are occurring in travel distribution. American, as the largest airline in the world, and Sabre, as the largest GDS in the United States, were merely the most visible players in what is a complicated transition for all traditional airlines and GDSs."Cush thanked Sabre "for having the fortitude and vision to see a difficult negotiation through to a mutually beneficial outcome."While the American-Sabre deal gave many agents a last-minute reprieve, some agents also received some unwelcome last-minute news.With just a few hours' notice, Delta told agencies and corporations using Amadeus that it would begin charging them $3.50 per segment on all Amadeus bookings as of noon on Sept. 1. The fee applies to subscribers in the U.S., Puerto Rico and the U.S. Virgin Islands.Amadeus complained it received no notice of Delta's intent until Sept. 1. Four days later, Amadeus sent a notice to customers saying that it would "protect all Amadeus subscribers from any Delta cost-recovery fees" incurred from Amadeus bookings.That's different from Amadeus' previous wording regarding American and Northwest. In those cases, Amadeus said it would temporarily reimburse agents for those surcharges.Amadeus spokeswoman Debbie Iannaci would not provide details on the nature of that protection.Delta's $3.50 fee was directed at Amadeus only. Delta has long-term content agreements with Sabre, Galileo and G2 SwitchWorks, and is believed to be negotiating with Worldspan.Delta is making no guarantees to agencies and corporations about providing Amadeus with content."Web fares and private or unpublished fares (such as corporate-negotiated fares and tour/net fares) may be provided by Delta, but are not required to be provided by Delta under the terms of the existing Participating Carrier Agreement between Amadeus and Delta," the airline stated.Under the current PCA, which became effective when Delta's content agreement with Amadeus expired on Aug. 31, the fees that Amadeus charges Delta likely soared to the level that had been in place three years ago.Unlike American, Delta is encouraging Amadeus subscribers to use the airline's agent Web site to book Delta flights and to use G2 SwitchWorks, which the airline characterized as a viable alternative to Amadeus.Full content a fuzzy conceptThe uncertainty of the Delta-Amadeus situation exemplifies the difficulties some agencies still face as they sort through distribution changes and try to determine what they will mean in the long term.For example, there is still some uncertainty about what "full content" entails in many of the airline-GDS agreements. Sabre, putting its stamp on the issue, informed agents about its "very clear" definition of full content.Sabre said the definition included "all published fares as well as private fares negotiated by an agency or by the customer of an agency." Sabre also said that any private fares made available to a corporation must be made available to that corporation when it chooses to use a Sabre-connected agency.In addition, full content includes Web fares, promotional fares and discounts that the airline makes available to the public for sale through the airline's Web site, reservations offices or online agency."This includes e-mail or other airline-direct promotions that offer fare discounts to a broad group of consumers," Sabre said.Sabre did not further define what constitutes a broad group of consumers. But under new agreements with Worldspan and Galileo, some airlines stated that they had retained exceptions to full content, including offering targeted promotions or special pricing to their most frequent flyers.Agencies in a bindMeanwhile, travel agencies must decide how to deal financially with segment fees or reduced GDS incentives.Fifty percent of 20 midsize corporate agencies polled by The Beat, a travel business newsletter, said that they plan to pass on to clients the cost of participating in their primary GDS provider's "optional full content" program, the newsletter reported on Sept. 5.Among the other half, five said they would instead absorb the per-segment cost of 80 cents, the newsletter reported.Paul Ruden, ASTA's senior vice president for legal and industry affairs, said it was difficult to pinpoint how agencies were reacting."We have, I think, compelling anecdotal evidence that the effort to recoup the lost incentives or the segment fees from customers is highly variable," said Ruden.Some agencies have said they will or are, some have said they will not and some are charging a higher fee, he said."There's a lot of negotiating going on with corporate clients and the like," Ruden said.To contact the reporters who wrote this article, send e-mail to Andrew Compart at email@example.com or Dennis Schaal at firstname.lastname@example.org.