Mark Pestronk
Q: My agency's GDS contract requires that we put at least 90% of our GDS bookings through that system. If we don't, we have to pay a penalty of $2.40 for each booking outside our contracted GDS. Since British Airways' parent company is trying to get agencies to use other booking methods, such as IATA's New Distribution Capability, would our use of any of those methods cause us to violate the 90% clause and thereby incur the penalty?
A: The answer depends on the exact wording of the 90% clause in your GDS contract, how your vendor interprets that clause and whether the vendor can even find out about your use of alternative systems.
All three U.S. GDS vendors have market share clauses in their standard contracts with larger agencies. Sabre was the first to adopt such a clause about a dozen years ago. Travelport followed a few years later, and Amadeus has only recently tried to impose a share quota for larger agencies.
The language of the vendors' share clauses varies quite a bit. Sabre's contract states, "If customer processes at least 90% of its total global GDS bookings through the Sabre system," then a penalty does not apply. Later in the contract, Sabre defines a GDS as "global distribution system or computer reservations system such as Galileo, Worldspan, Sabre or Amadeus and their successors and any third-party computerized reservations system that acts as an intermediary between multiple travel [suppliers] and travel agencies to provide reservation services to such agencies."
Strictly speaking, any third-party system in which you can book multiple travel suppliers qualifies as a GDS. This definition may apply in the Lufthansa suit against Sabre, in which the definition of GDS is also an issue, but the definition of the term in that carrier's agreement with Sabre may well be different.
Travelport is vague: "Subscriber agrees to generate 90% of its total travel reservations in the Travelport GDS each contract year" or a penalty applies. The key term "travel reservations" is not defined, so Travelport agencies are left to guess what it means.
Again, strictly speaking, any booking through any system, including even the telephone, would appear to qualify. However, I am certain that Travelport did not intend to have such a broad prohibition.
Amadeus is more limited but still unclear, "Customer agrees to produce a percent of its total net GDS air segments through the system during each 12-month period of the agreement ("Annual System Use Goal") as described below ... " and the percentage is typically 100. The word "GDS" is not defined, so we are left to guess what Amadeus had in mind and why it chose to limit the quota to airline bookings.
All these clauses were probably originally added simply to try to prevent agencies from using the other two traditional GDSs. There is no way to know whether the vendors will now start using them to penalize agencies for using other kinds of systems.
There is also no way to know how the vendors could possibly police whether an agency is using another method of making reservations and for how many bookings. For example, neither the Travelport nor the Amadeus contract requires agencies to report or even record bookings outside the GDS, and Sabre requires such reports only in very limited circumstances.