SOUTHLAKE, Texas -- Something's got to give, said Sabre chief
executive William Hannigan, and that something is agency
incentives.
Calling for a new booking fee and agency model, Hannigan said
agency inducements will be trimmed when subscribers renew their GDS
contracts.
The backdrop for the statement was Sabre's estimates that it
will lose $19 million to $23 million in revenue this year from
United, Delta, Northwest and Continental because of their joining
the Sabre Direct Connect Availability Three-Year Option booking-fee
discount program. [Another participant, US Airways, wasn't included
in the revenue-impact projection because the airline joined DCA
last year, Sabre said].
The growth in agency incentives per booking is in the low- to
mid-teens at Sabre, and although that's down from about 30% growth
two years ago, it's still not low enough, Hannigan said.
"The model has to change, not only on the [segment pricing] side
but also on the incentive side," he said. "It'll take time to
change pricing in the marketplace, as contracts come due."