Q: Sabre is trying to camouflage
an enormous financial blow to travel agencies by dressing it up as
an attractive new program called Efficient Access Solution. Sabre
is pressuring our agency to agree to the voluntary program, under
which my agencys segment incentive will be cut from $1.20 to 40
cents. If we agree to this 67% cut in
return for access to all fares on participating carriers and
freedom from service fees levied by those carriers, what will our
new legal rights be? What will happen to us if we dont agree by
signing the EAS amendment to our Sabre contract? If bad things
happen, what will our legal rights be?
A:
Sabre executives claim that EAS is a victory for agencies, which
will now be assured of key benefits and protections, including full
content and protection from service fees. However, it is by no
means clear that Sabres expensive insurance policy protects you
from anything more than a phantom menace.
Aside from revenue
cut, the trouble with the EAS program is this: If the major
airlines dont hurt nonparticipating agencies, participating
agencies will be no better off under the program, and they may not
be able to get out of it.
Sabre has asked
agencies to sign an amendment that is so totally one-sided that it
appears to have emerged from a legal committee whose mission was to
draft meaningless happy talk while leaving agencies as powerless as
possible. Careful perusal of this amendment shows that:
"
Once in the program, an agency can get out only if the programs
benefits become materially decreased, which is undefined and will
no doubt be interpreted by Sabre to mean that you cant get out as
long as the current airlines stay in, even if they never levy fees
on nonparticipating agencies or never block their access to
content.
"
Participating airlines commitments can be short-term, whereas you
must participate for the duration of your GDS contract. So, if a
single major airline drops out and hits you with fees in 18 months,
it is not clear that you have suffered a material decrease in
benefits.
"
Sabre can modify any component of the program unilaterally by
posting a notice on a Web site. So, Sabre can increase your cut
from 80 cents to your entire $1.20, and you would have no right to
get out of the program or your Sabre contract.
If you nevertheless
feel that you need to get into the EAS program, you should at least
try to have Sabre agree to change the standard EAS amendment to
give you better termination rights and protection against further
incentive cuts.
If you decide not
to join, you probably cannot terminate your Sabre contract if
airlines start blocking content or making you pay fees for access
to fares. Under the standard Sabre contract in effect since early
2004, you can only terminate if Sabre forces you to accept a cut in
your incentives.
Correction: In my recent column about
Expedias financial results ["Expedias sales slide: Good news for brick-and-mortar
shops?," June 5, 2006], I said that during the
first quarter of 2006, Expedias domestic airline bookings grew by
10%. However, I should have omitted the word airline, as Expedia
does not separately disclose its airline bookings. Expedia also
took issue with my comparing its 3% ticket-transaction growth
unfavorably with TQ3Navigants 10% transaction growth; Expedias air
and nonair transactions grew 12%.
Mark Pestronk
is a Washington-based attorney specializing in travel
law.