Mass. -- Longtime Sabre agency Garber Travel here has begun booking
United tickets through ITA Softwares alternate distribution system
and says it intends to move all of its United business to ITA by
the middle of next year.
For now, the travel
management company, which did $368 million in sales last year, is
booking just 50 United tickets per week through ITAs 1U system.
Garber agents in just one office are using ITA to book the carriers
tickets for about five clients. United is one of the agencys
preferred carriers, accounting for about 50,000 segments a
In the second
quarter next year, we think things will really percolate, said Joan
Kaplan, Garbers executive vice president. Our goal then is to book
all our United tickets through ITA.
Derek Lewitton, the
former United official who is now vice president of sales and
strategy for ITA, said Garber is the first travel management
company to go public with its deployment of ITA, but he said other
agencies are using it as well.
is a drop in the ocean, Lewitton said, referring to the volume of
tickets that Garber is processing through ITA. The question is
whether this signals the opening of the floodgates or
Sabre, which has
provided GDS services to Garber for decades, said it will begin to
charge fees to agencies and airlines if they create passive
segments in the Sabre GDS when they book through alternative
We expect to be
compensated for the value we deliver, a Sabre spokeswoman said. We
will charge the agency and the airline if they ... bypass the Sabre
system and use non-billable booking codes.
said Garbers non-Sabre activity is limited and will have no
financial impact on Sabre.
We are not
concerned that our customers are doing testing, the Sabre
spokeswoman said. We are confident we will stack up
note that Sabre and other GDS companies are concerned about the
financial impact if dozens of large agencies move bookings to
that Garber Travel creates passive segments in Sabre to make the
process seamless to clients and to deliver the full itinerary
because ITA only does air at this point.
She said she was
unconcerned about any passive segment fees from Sabre because ITA
will be picking up the tab.
Lewitton of ITA
said that Garbers creation of passive segments for ITA bookings is
a function of the agencys mid-office and back-office systems, and
not something that other agencies using 1U need to do.
We have a full PNR
database right now, Lewitton said. We can keep track of any
bookings made with us. There will be no need for passives to be
parked anywhere in the medium term.
For its part, United said
it was discussing with Sabre the issue of passive segment fees and
didnt want to comment further on it.
Kaplan said that
Garber is working on a contract with United for gain sharing,
Uniteds term for incentives.
At a meeting with
top agencies at its headquarters earlier this year, United offered
incentives to retailers to encourage the use of low-cost,
We fully intend to
deliver on our commitment to share distribution savings of up to $5
on a per-ticket basis with qualifying early adopters such as Garber
Travel, a United spokeswoman said. Under the program, a qualifying
GDS is a GDS whose per-ticket cost to United is $4 or
If United pays ITA
or G2 SwitchWorks $4 per booking and pays agencies a $5 inducement,
thats still less than the $12 or so in booking fees and incentives
that airlines currently pay the legacy GDSs. G2, for one, has
talked about its booking fees being about $1.50 per
shareholder in Synergi Global Travel Management, does more than
half of its business outside of New England and has 60 offices
worldwide, including branch offices in Washington; Chicago; Irvine,
Calif.; Toronto; and London.
Its target client
annually spends $1 million to $10 million on travel.
Garber agents using
the Web-based 1U system pull up an ITA screen instead of a Sabre
screen on their desktops and can use Sabre-style or Apollo-style
formats from ITA to access flight availabilities, Kaplan
She added that the
ITA system processes the reservation, which goes directly into
Garbers back-office system.
We can tell the
difference between an ITA booking, an Internet booking, a Sabre
booking or any other type, Kaplan said.
executive vice president said the agencys Sabre contract runs
another two-and-a-half years. Kaplan said Garber has a good
relationship with Sabre, has used the Sabre system for decades and
doesnt wish to hurt Sabre.
This is where the
industry is going, Kaplan said, explaining the decision. I think
the GDSs will have this technology, whether they start from scratch
or purchase it.
And we will be
ahead of the curve in the learning process, Kaplan
Kaplan said Garber
can transition all of its United volume from Sabre to ITA without
incurring shortfall penalties from Sabre because the travel
management company did $65 million more in segments last year than
it had anticipated when it signed its Sabre contract.
I can do all of my
United segments through ITA and the rest through Sabre and we still
would be ahead [of projections] with Sabre, Kaplan said.
Pointing to Sabres
purchase of GetThere several years ago, Kaplan said she wouldnt be
surprised if Sabre or another company purchased ITA. Kaplan added
that she believes that Sabre is developing new architecture to
compete with the new entrants.
Lewitton of ITA,
meanwhile, said he was not surprised that Sabre would threaten to
charge fees for passive segments, and he joked that ITA would not
reciprocate and charge Sabre such fees one day if ITA agencies use
1U to make a Sabre booking.
Lewitton said he
would be curious to see if Sabre follows through on its stated
intention to charge fees for passive segments because tracking
these segments is not automated in the GDSs.
ITA and several
airlines, meanwhile, are continuing their efforts to wean agencies
off the traditional GDSs.
airlines are approaching corporate customers about getting better
discount structures for using ITA.
We are seeing
airlines preparing to deploy some exciting things, Lewitton
reporter Dennis Schaal, send e-mail to [email protected].