NEW YORK -- If the cash-strapped network airlines were focused
solely on saving money, they would all join Galileo's Momentum
program, which cuts GDS costs by 20%, said Flo Lugli, senior vice
president of airline strategy for Galileo.
But they're not.
"If it was all about costs, they'd be beating down the door to
join the program," Lugli said. "But it's not about costs; it's
about control of the marketplace."
Lugli spoke as a panelist at the Travel Commerce Conference and
Expo, held here this month, during a session titled "Us Against
Them, Against Them" -- a session during which an airline
representative was conspicuously absent.
Momentum requires airlines to make Web fares available in the
GDS to Galileo-connected travel agencies joining the program.
So far, only United, which has filed for bankruptcy protection,
and US Airways, which just got out of Chapter 11, have joined
"Carriers want to reduce costs but say they don't want to lock
in for [a contractual] three years," Lugli said, "or they say they
want more than a 20% reduction in distribution costs."
What airlines really want is to control the traveler and drive
bookings through their own Web sites and Orbitz, said panelist
Ellen Keszler, president of Travelocity Business and formerly
Sabre's senior vice president of travel agency solutions in North
That strategy doesn't make sense, Keszler said.
"The average ticket price sold by travel agents is $200 higher
than the average ticket sold on line," Keszler added. "And it costs
airlines $3.34 more per ticket to sell through Orbitz than to
distribute through a Sabre-connected agency. This has been
substantiated by some airlines."
Like Galileo, Sabre launched a program, Direct Connect
Availability, that reduces distribution costs by 13% for carriers
in return for making Web fares available for Sabre-connected
So far, only one major network carrier, US Airways, has signed
After the panel session, Travel Weekly asked Keszler why Sabre,
unlike Galileo, chose not to partner with travel agencies to reduce
the airline's distribution costs and make Web fares accessible in
"We're concerned that many agencies can't afford to pay 50 cents
[in GDS incentives] per segment," Keszler said.
Several Sabre-connected agencies have joined American Airlines'
EveryFare program, which requires agencies to assume an increasing
portion of the carrier's GDS costs over five years.
In return, American loads Web fares in the GDS and offers an
exclusive 5% discount on some published fares.
Keszler said agencies signing up for EveryFare are taking a big
"It's not a good deal for travel agents. There's no guarantee in
the contract that American will continue to provide Web fares,"
Vin Rosa, another panelist and vice president of Navigant
International's Northeast region, said his agency has no plans to
join Momentum or EveryFare because they don't offer complete
solutions to the Web-fare problem (only one or two airlines
participate) and because Navigant's clients -- business travelers
-- don't select Web fares very often.
"Do fares exist that can't be found in the GDS? At times, yes,"
Rosa said. "But the percentage of fares [applicable to business
travelers] on the Web that you can't find in the GDS is pretty