Garber Travel heads to ITA for United tix

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CHESTNUT HILL, 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 year.

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.

Numerically, this 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 not.

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 systems.

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.

The spokeswoman 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 well.

However, observers note that Sabre and other GDS companies are concerned about the financial impact if dozens of large agencies move bookings to competitors.

Kaplan confirmed 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, alternative GDSs.

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 less.

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 trip.

Garber, a 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 said.

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.

The Garber 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 added.

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.

Lewitton said airlines are approaching corporate customers about getting better discount structures for using ITA.

We are seeing airlines preparing to deploy some exciting things, Lewitton said.

To contact reporter Dennis Schaal, send e-mail to [email protected].

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