Travel Weeklys Technology E-letter: July 26, 2006

NORTHWEST AIRLINES informed travel agencies and corporate travel departments that it will begin charging a $3.50 per-segment service fee Sept. 1 for Northwest and KLM bookings through nonpreferred distribution products. The airline thus matched the newly announced programs of American, United and Continental. Northwest said it would initially provide full content to more expensive booking channels, suggesting that it might withhold content later. United said it may restrict content in nonpreferred channels, and Continental said it definitely will restrict content. American is on record as saying that it intends to provide full content to nonpreferred channels, but the only way to guarantee full content from the airline is to sign up for one of its preferred GDS programs.

MEANWHILE, THEBOOKING FEES that American would begin paying to Sabre and Amadeus Aug. 1, absent new content agreements, would rise astronomically, an airline official said. With Americans full-content agreements with Sabre and Amadeus expiring July 31, the airline is believed to be subject to booking fee increases of 20% to 30%. Charlie Sultan, Americans managing director of sales, planning and analysis, told that part of the reason for the $3.50 charge to agents for bookings through nonpreferred channels would be to offset the price increases that American would face. That fee will partially defray some of the cost, he said. As of last week, Sabre and American werent conducting any talks about signing a new agreement.

WORLDSPAN unveiled two opt-in programs for travel agencies, including one that guarantees GDS access to full content even if participating airlines decide to unbundle products and merchandise them in new ways. Worldspans Super Access Product provides agencies with published, private and promotional fares from program carriers American, United, Continental, Northwest and US Airways for five years. These airlines agreed to forego charging agencies any content fees through this program. The program is believed to come with zero incentives for agencies, although Worldspan will negotiate agreements on an agency-by-agency basis.

AGENCIES THAT CHOOSE Worldspans other opt-in product, the Subscription Access Product, will see no change in their financial arrangements with Worldspan and will have access to published content from the five program carriers. However, these agencies will be subject to new airline fees, and access to private, negotiated, and opaque fares and products will be at the discretion of the airlines, said Worldspan Chief Commercial Officer Ninan Chacko. Agencies that stick with Worldspans existing General Access Product need take no action to enroll, but they may be subject to airline fees and even published content may be unavailable if airlines decide to withhold it, Chacko said.

GALILEO unveiled its optional program for agencies, the Content Continuity Program, which would begin Sept. 1. (And Sabre extended the deadline a month to Sept. 1 for agencies to make a decision about participation in its own Efficient Access Solution.) Galileos Content Continuity Program assures agents of full content, meaning all publicly available fares, including Web fares, and access to negotiated fares in the manner equal to or better than any other GDS. Galileo said it decided to implement an optional program even though it has consistently stated that cost-shifting to agencies is not in the best interests of the travel industry. It is believed that steep cuts in incentives are in the offing for agencies that sign up for the Content Continuity Program.  Galileo, meanwhile, signed a five-year full-content agreement with Northwest, making Galileo the first traditional GDS to have inventory from all six network carriers locked up. G2 SwitchWorks has long-term deals with the six network carriers, along with AirTran, Alaska and JetBlue.

EXPEDIA CORPORATE TRAVEL intends to launch an agency in Germany in the fall, supplementing its international presence in France, the U.K., Belgium and Canada, officials said. ECT Germany, based in Munich, will focus on small to midsize corporations, giving them access to published rates, including Web fares, and corporate negotiated rates through an online booking tool, ECT said.


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