CHICAGO -- The
booking fees that American Airlines would begin paying to Sabre and
Amadeus Aug. 1 absent new content agreements would rise
astronomically, an airline official said.
With Americans full
content agreements with Sabre and Amadeus expiring July 31, the
airline is believed to be subject to booking fee increases of 20%
to 30%.
Charlie Sultan,
Americans managing director of sales, planning and analysis, told
TravelWeekly.com that part of the reason for the $3.50 charge to
agents for bookings through non-preferred channels would be to
offset the price increases that American would face.
That fee will
partially defray some of the cost, he said.
According to
Sultan, the airline intends to continue providing full content
through Sabre and Amadeus if no actions are taken against
American.
He said the airline
plans on being the least disruptive as possible when the
full-content agreements expire and intends to continue to provide
that content through Sabre and Amadeus, but he added that the only
distribution systems with full-content guarantees from American
over the next five years are Galileo, Worldspan, G2 SwitchWorks and
Farelogix.
It is our intention
to provide full content, Sultan said.
However, Sultan
added that American has been negotiating with Sabre for more than a
year, and there are no current discussions between Sabre and
Amadeus and none scheduled.
People think we
will get a deal with the four GDSs, but thats a business risk that
agencies are taking, Sultan said during a sit-down with TravelWeekly.com
July 18 at the National Business Travel Association conference
here
I hope we do reach
agreements, Sultan added. Weve been working on it for over a year.
Im not sure if it is going to happen.
How it all
shakes out
About one-third to
one-half of Americans flights in North America go through Sabre and
Amadeus, Sultan said, adding that the two GDSs will be making a lot
of money on us if the higher rates kick in Aug. 1.
With the content
agreements with Sabre and Amadeus expiring July 31, Americans
underlying participating carrier agreements (PCA) with the two GDSs
would kick in. The 20% to 30% increases in booking fees that
American would be charged are relative to the agreements that
expire at the end of this month.
The fee increases
are even larger if compared with the new fee structures that
American agreed to with Galileo, Worldspan, G2 SwitchWorks and
Farelogix.
Sultan said it
wouldnt be rational and would be short-sighted if Sabre and Amadeus
took actions against American when content agreements
expire.
But he said the PCA
agreements give American some flexibility in altering the content
the airline provides.
Sultan said
Americans strategy is to drive down distribution costs so that
airline can better compete with low-cost carriers, and it is
obviously in our best interests to negotiate deals to provide
travel agencies with the content that they need.
He said American
views the GDSs that the airline has new agreements with as
efficient channels, and has no intent to drive travel agencies to
book directly with American.
It is not our
intent to try to shut down the GDSs, he added.
Sultan declined to
discuss the issues that need to be solved to come to terms with
Sabre and Amadeus. He said he didnt know if the Sabre-Amadeus
agreement to share content in the event an airline exits one of the
systems is a factor that enables Sabre and Amadeus to dig in their
heels in the negotiations.
Regarding issues
about the definition of full content, Sultan said Worldspan and
Galileo negotiated the same protections to continue to access
content if American decides in the future to unbundle fares and
merchandise products in new ways.
To
contact reporter Dennis Schaal, send e-mail to [email protected].