veryFare, it appears, is not going to save American Airlines president Don Carty the $400 million he hoped it would. Perhaps he was thinking too small. He could have saved a billion or two if he had come up with a program that offered agencies even lower fares if agents would agree to pick up contractual obligation for the airline's jet fuel, maintenance, new equipment, leasing, labor, airport facility charges, insurance, G&A and catering expenses. It could have been called EveryCost.

Accepting GDS costs -- until now, a supplier's cost of doing business -- is simply not an attractive proposition for most agents.

While I argued in this space two weeks ago that agents' interests lie, in this case, more closely with the GDSs than with the airline, it should be noted that the EveryFare plan is only a slight variation of two earlier GDS plans that landed with equally loud thuds.

In the past, the GDSs have shown themselves to be more frightened by the airlines' distaste for res system fees than they were comforted by the thought of solidarity with agents.

Last year Worldspan, and, earlier this year, Sabre (and its subsidiary GetThere), nervously observed that it's not written in stone that suppliers had to carry the full weight of segment fees. Each floated proposals that agencies could give up some of the incentive payments they receive from the GDS to offset income the GDSs would lose if they reduced airline segment fees. Agents, they suggested, could make up for their loss by adding fees to clients.

But unlike EveryFare and its access to Web fares, there was no carrot for agents in these plans, and the proposals were greeted with profound disinterest.

As everyone tries to get someone else to shoulder the segment fee, it should be remembered that none of the three parties to this dance -- airlines, GDSs, agents -- currently pays the cost of a segment fee. The customer does. This is a fight about who gets to break the bad news to the consumer: the airline or the travel agent.

The GDSs cannot be disinterested observers in this fight because the airlines have declared war on segment fees, and they must have noticed the results after the airlines declared war on travel agent commissions. They may be saved, however, through an interesting confluence of aligned interests.

Web fares are popular with consumers. Travel agents have said that they're very interested in having Web fares in the GDSs, for the benefit of their clients, for convenience and so they can meet GDS productivity clauses. Airlines say they don't object to putting Web fares in the GDSs in theory -- but they won't put them in if they have to pay the regular segment fees to book them.

The GDSs don't really profit by having Web fares excluded from their inventory -- these are seats that, when sold on the Web direct, don't generate revenue for them.

So far, the GDSs have addressed the problem of their survival with little more than fretting. They need to sit down with travel agents -- their natural allies, who also benefit from an independent supplier distribution system -- airlines, large corporate travel managers and perhaps the Department of Transportation.

Together they might actually come up with a (lower) segment fee structure that applies specifically to Web fares. Corporate customers and agents might even indicate they'd pay a small but, percentage-wise, meaningful piece of the lowered segment fee to have access to Web fares.

The GDSs and airlines can spin their wheels on programs like EveryFare for a long time without accomplishing a thing. Or they can decide to focus on the bucks themselves, not on who's passing them.


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