here's a certain irony to the 50-year
journey of SatoTravel, which was once more dominant in its market
than Orbitz could ever hope to be.
Sato began operation in 1953 as the ultimate by-pass tactic.
With the benefit of antitrust immunity, the airlines set up
"impartial" joint ticketing offices at military and government
installations. They were known as Joint Military Traffic Offices or
JAMTOs. In 1970, somebody had the good sense to change the name to
SATO, for Scheduled Airline Traffic Office.
SATOs handled air, hotel and car rental reservations and other
services for military and government personnel, who were prohibited
from using travel agents. That's right, prohibited.
But after airline deregulation, time began to run out on
antitrust immunity. And it also ran out on the airlines' monopoly
on the sale of travel to the government.
In 1986, the SATO program lost its antitrust immunity and was
reorganized as an airline-owned corporation called Sato, Inc., or
SatoTravel. At about this time, travel agents started bidding on
Sato's accounts, and winning them.
In 1987, the words, "A full service travel company" began to
appear under the corporate logo on the company's letterhead and
other materials.
To make economic sense, all Sato and SatoTravel had to do was
sell travel to the government at less than what it would cost for
the airlines to pay a travel agent. When the commission rate was
10%, Sato could claim to be the low-cost channel, but that changed
in 1995. Two years later, the airlines sold SatoTravel to a group
of investors that turned it into a travel agency.
That investment group has now agreed to sell SatoTravel to
Navigant, a publicly traded travel agency and travel management
network that ranks among the top five in the country.
With Orbitz, we don't think it will take 50 years.