The so-called legacy GDSs, those technological dinosaurs, can still show flashes of cleverness and ingenuity, as demonstrated by the Ive-got-your-back agreement between Sabre and Amadeus.

Predictably, agents and corporate travel interests praised the agreement for its potential to protect them from collateral damage as the GDSs do battle with airlines and alternate distribution platforms.

We happen to think that ongoing battle is good for the industry, good for competition, good for pushing the technology frontier. However, theres no hiding the fact that agents and travelers could easily get caught in the middle if airlines drop out of this or that GDS as a ploy to negotiate lower booking fees.

Sabre and Amadeus say their principal concern is to have an insurance policy, to reassure their agency and corporate users that they will continue to provide full content if a carrier drops out of one of their systems.

The agreement seems to have the potential to achieve that end, but thats obviously not all that it does.

It also takes away some of the airlines new-found leverage in negotiating GDS booking fees.

For 20 years government rules required GDSs to charge the same rates to all airlines. A big airline with a high transaction volume could not get a lower rate than a small carrier, because the GDS could not offer differential pricing.

Now that this is no longer the case, it is widely believed that its only a matter of time before some airline demands a better deal under threat of withdrawal.

Its a real threat, real enough to elicit a response from Amadeus and Sabre that takes some of the edge off it.

Another side effect of the agreement is its impact on Galileo and Worldspan. They have no such insurance policy and might now be seen as more vulnerable to airline threats than Sabre and Amadeus.

And if two big GDS operators can agree to share content for dropout airlines, they can agree to other kinds of sharing.

Airlines share codes all the time. They share airport gates. They share ground equipment. They perform maintenance for each other. Theyve been on a sharing binge since the industrys earliest days.

They even had an insurance policy in pre-deregulation days called the Mutual Aid Pact, whereby they made cash payments to an airline idled by a strike, to take some of the negotiating power away from the striking unions.

Hows that for an interesting parallel?

The GDSs were created by what are now known as legacy airlines. Maybe the apples didnt fall far from the trees.

The China watch

If youre not watching the growth (or explosion) of Chinas economy, you can still get a sense of how it might impact the travel business from the latest forecast of the World Travel and Tourism Council, excerpts of which appear in "By the Numbers: China poised to make huge strides in tourism, says WTTC."

By some measures, China will have one of the largest tourism economies in the world in about 10 years, according to the WTTC.

International visitors will spend more in China than anywhere else except the U.S. And Chinese residents will spend more on travel than the residents of any nation except the U.S. and Japan.

Thats something worth watching.

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