Travel Weekly's Technology E-letter: April 18, 2007

TRAVELPORT appointed Steve Barnhart CEO of its Orbitz Worldwide division. The move comes as Travelport prepares an IPO of all or parts of the division. Barnhart, hired by Orbitz in 2003, retains his president's title, but drops his CFO role. Travelport stated that it hopes to complete a search for a new CFO of Orbitz Worldwide in the second quarter. Travelport is slated to publicize details of the IPO in the second quarter, too. Orbitz Worldwide takes in a host of brands, including Orbitz, CheapTickets, eBookers, HotelClub and RatesToGo. Travelport stated that Barnhart was "a key member" of the finance team that executed an Orbitz IPO in 2003. Orbitz, founded by major airlines, traded on the NASDAQ from December 2003 to November 2004 until it was acquired by Cendant. Barnhart became CFO of Orbitz in November 2004 and became president and CFO of Orbitz Worldwide in September 2006.

AMADEUS-CONNECTED AGENCIES and corporations in the U.K. and Ireland became subject to British Airways surcharges of 3 pounds per segment beginning April 10. John Lampl, a British Airways spokesman in the U.S., stated, "As previously announced, from April 10 BA is implementing a 3-pound surcharge per segment on U.K. and Ireland bookings made through non-preferred GDSs." That would include Amadeus, which is negotiating a new content agreement with the airline. The surcharge would also seemingly apply to U.K. and Ireland agents using Galileo, Sabre and Worldspan if they have not agreed to participate in new optional content programs that reduce their compensation from the GDSs. Amadeus has stated it would reimburse agencies for the surcharges through May 1 and evaluate its policy thereafter.

AMADEUS AND SABRE confirmed yesterday that their content-sharing agreement expired last month and was not renewed. The unprecedented, one-year global agreement, introduced March 6, 2006, to much fanfare and controversy, would have enabled either to share airline inventory with the other if an airline or airlines dropped out of one of the two res systems. Neither company elaborated on why they decided to let the agreement, which had a renewal option, lapse. There was no announcement about the agreement's demise; officials from the two companies responded to an inquiry and confirmed the pact quietly ran its course. However, it is clear that with major U.S. airlines having come to terms with Sabre and Amadeus last year, there was a dimished need for a content-sharing arrangement. Meanwhile, several major international carriers will be negotiating new contracts with the GDSs in the next couple of years, and the European Community is mulling deregulating the GDSs. Perhaps a future new version of the Sabre-Amadeus agreement should not be ruled out if conditions merit it.

EXPEDIA INC.'S TRIPADVISOR acquired deal-publisher and travel search company Smarter Travel Media for an undisclosed sum. In a separate deal around the same time in mid-February, TripAdvisor also acquired SeatGuru.com, a Seattle company that specializes in providing information for road warriors about airline seats on more than 40 airlines. TripAdvisor spokesman Brian Payea said the acquisition of Smarter Travel Media gives TripAdvisor new capabilities in offering travel search functions, expert advice and deals. Smarter Travel Media operates several Web sites, including SmarterTravel.com, BookingBuddy.com and MyBusinessTravel.com. Payea said there have been no major changes in the operations of TripAdvisor and Smarter Travel Media as of the recent acquisition as there has been no integration between the two companies. Forrester Research analyst Henry Harteveldt said Expedia's market muscle likely will invigorate Smarter Travel, enabling it to better compete against other travel search engines and deal publishers, including Travelzoo. He also noted that the acquisition of SeatGuru.com would better enable Expedia Inc. units to target unmanaged business travelers.

BOOKINGBUILDER TECHNOLOGIES said it filed a complaint with the Office of New York State Attorney General alleging that Sabre Holdings is engaged in anticompetitive practices. And Connecticut Attorney General Richard Blumenthal told TravelWeekly.com last week that he had discussed the issue with a BookingBuilder lawyer, who indicated the company intended to file a complaint in Connecticut, as well. BookingBuilder offers a Web search and booking tool used by some 8,000 agents worldwide. The dispute with Sabre revolves around negotiations over a software developer's agreement, access to the Sabre system and Sabre's launch of a competing product, NetCheck, in partnership with Atlanta-based AgentWare. BookingBuilder CEO Seth Perelman alleged that Sabre began using anticompetitive practices when it launched NetCheck and agreed to charge NetCheck less for access to the Sabre GDS than it has proposed to charge BookingBuilder. "This means they are using their power as owner of the Sabre platform to force our product to have a base cost that is higher than what they charge end users for their own product," Perelman said. "This is patently unfair." Sabre officials countered that the issue should be viewed as part of Sabre's 2-year-old policy to clamp down on airlines, agencies, fare aggregators and corporate booking tools accessing the GDS for unbillable passive segments, and a year-old initiative to sign third-party companies to new agreements so Sabre can control access to the GDS. Greg Webb, the Sabre Travel Network's chief marketing officer, said Sabre is justified in asking for compensation when third parties use the GDS. Regarding the allegations about anticompetitive practices, Sabre officials noted that NetCheck charges agencies $3.75 per booking. Perelman said Sabre proposes to charge BookingBuilder $3.75 per booking plus an annual fee.

Technology Editor: Dennis Schaal

Phone: (201) 902-1904

[email protected]

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