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