Travel Weekly's Technology E-letter: Dec. 27, 2006

EVEN SO-CALLED LIMITED TRAVEL DISTRIBUTORS, it turns out, apparently have value. Sabre and other GDS vendors used to deride alternative distributors like G2 SwitchWorks as LTD. But with airline negotiations finished and a buyout in the works, Sabre chairman and CEO Sam Gilliland recently held out the possibility of collaborating with G2. Gilliland discussed the issue in response to a question from a Sabre employee during a Dec. 12 conference call, just hours after revealing that Texas Pacific Group and Silver Lake Partners had agreed to buy Sabre for $5 billion and turn it into a privately held company. Gilliland said TPG has a 20% stake in G2. Gilliland noted that while Sabre officials haven't spent much time talking to the new owners about G2 yet, working together is "entirely possible." However, later in the discussion with Sabre employees, Gilliland noted that TPG has a minority stake in G2 and only one board seat. "So I think there's little likelihood that there would be any collaboration there," Gilliland said.

MEANWHILE, G2 SWITCHWORKS, reacting to Gilliland, said it was open to new partnerships. "G2 is a company with a track record of partnering with companies who share our innovative mindset -- with ITA Software, Trisept Solutions, BookingBuilder and Navitaire being some selected examples," said Ellen Lee, vice president of business development for G2 SwitchWorks. "If it would expand our reach and help us provide the best service to our existing and potential customers, we'd be open to a discussing a business relationship with Sabre, and other GDSs for that matter." 

ORBITZ AND G2SWITCHWORKS settled their litigation, and terms of the agreement were not disclosed. The settlement took place months ago, on Aug. 30; however, the agreement remained unreported in the press. Orbitz had accused six G2 SwitchWorks employees and consultants, all of whom were former Orbitz employees, of pilfering Orbitz trade secrets to develop the G2 reservations system. G2 SwitchWorks had countered that Orbitz allegedly was long aware of G2 SwitchWorks' plans and even had discussed the possibility of a joint venture, but the relationship soured when Cendant revealed its intent to buy Orbitz in 2004.

AND IN OTHER COURTROOM NEWS, the litigation between Travelport's Orbitz and Worldspan, while still active, is in legal limbo with neither party going to the mat with aggressive new motions for the time being. That's because the $1.4 billion merger of Travelport and Worldspan would render the litigation moot. Officials expect the closing to take place in the second or third quarter of 2007, and at that juncture the litigation would go away. In 2005, Worldspan accused Orbitz of improperly using Worldspan data and other "GDSs," including ITA Software, in connection with Supplier Link [direct-connect] bookings. And, Orbitz alleged that Worldspan snookered it into signing a new long-term contract while hiding objections to Orbitz's business practices, and denied Orbitz access to certain low cost carriers through Worldspan.

ORBITZ introduced a new perk for customers who book flight and hotel packages. If flights are delayed and customers will arrive at their hotels after midnight, Orbitz will contact travelers and, if given permission, will notify the hotel that their guest will be arriving late in the hopes of keeping the reservation. If flights are cancelled, Orbitz will call customers and, with their permission, rebook clients at a new hotel. Orbitz for Business and Travelport for Business are working on a similar program for their corporate clients.

Technology Editor: Dennis Schaal

Phone: (201) 902-1904

[email protected]

For promotional opportunities in the E-letters, contact [email protected].

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