Travel Weekly's Technology E-letter: Jan. 26, 2005

UNITED conducted a meeting at headquarters last week with 40 agencies and 30 corporate accounts urging them to explore use of start-up alternative GDSs, including G2 Switchworks, ITA Software and FareLogix. United said it was considering paying early adopters of the GNEs (GDS new entrants) inducements to replace lost incentives if agencies and corporations move some of their volumes to the start-ups. United stated that the inducements would be temporary, lasting until some 20% of United's volumes were going through the low-cost start-ups. G2 SwitchWorks is already processing airline bookings for seven major carriers and says the booking fees that it charges airlines are a fraction of what GDSs charge.  

BID FOR AMADEUS: It turns out that Citigroup Venture Capital Equity Partners, the U.S.-based buyout firm that leveraged up some monies to buy Worldspan, submitted a bid for Amadeus that was higher than the one selected by Amadeus' owners, Air France, Lufthansa and Iberia. They decided to negotiate instead with two firms, Cinven and BC Partners, whose $5.7 billion bid was lower than CVC's, according to several sources. Under the parameters of the deal, which is expected to be announced shortly, the airlines would lower their equity stakes slightly but give an equity and voting-rights majority to the new owners, who would take Amadeus private. There has been much speculation on why the airlines accepted a lower bid. Among the theories: They wanted Amadeus to remain under European control, they didn't want to merge with Worldspan or they think they can buy Worldspan on the cheap later.

SABRE: We might as well all set up shop in Hong Kong, Beijing, London or Paris because that is where a lot of the action is taking place this days. Consider that Sabre is positioning itself to take 100% ownership in the Asia-Pacific Web site, Zuji.com, next year. Sabre, which holds a minority stake through Travelocity, negotiated a put option with partners Abacus and AGC Holdings, under which they can sell their stakes in Zuji to Travelocity in January 2006. Travelocity said the arrangement gives AGC and Abacus time to decide if they want to continue to support Zuji. Travelocity said a takeover could enhance its ability to expand into China and India.

CNG: Meanwhile, Ireland based CNG Travel Group signed a three-year pact to distribute inventory from hotel properties in North America and Europe to Ctrip.com, a hotel and airline consolidator in China. Tzell Travel, the U.S. corporate agency, is part of CNG Travel Group. 

PEGASUS SOLUTIONS agreed to provide inventory from some 8,000 small and independent hotel properties to Opodo's Web sites in the U.K., Germany and France. The inventory from the Utell by Pegasus representation service will supplement Opodo's hotel distribution agreement with Worldres. Opodo is a European online retailer owned by Amadeus and nine airlines.

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