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."


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