As GDS deadlines draw near, agents play waiting game

A lot of agencies were consulting lawyers and accountants last week as GDS vendors circulated contract amendments, conducted negotiating sessions and conference calls with agencies and pressed them to decide about participation in optional programs to access full content.

But Walter Gay, president of Travel Automation Consultants in Aurora, Ore., characterized the interaction as a huge game of chicken.

Nobody is signing anything at this point, said Gay, who has Apollo- and Sabre-using clients. The GDSs are all getting nervous that they are going to have an influx of agencies signing up at the last minute. Well see if they extend the Sept. 1 deadline. I hope they do.

Vivienne Kouba, CEO of Journeys by Ambassador, an Apollo subscriber based in Eugene, Ore., concurred, saying a lot of agencies were networking and trying to share information. There is going to be a lot of hot-and-heavy thinking until the end of the month, Kouba said. The whole terrain is changing so fast.

And a top official at a corporate agency that uses Sabre characterized the agencys strategy this way: We are trying to come up with a creative way to mitigate that 80 cents [incentive reduction], to claw it back and to avoid the $3.50 airline charge through Sabre.

The discussions about optional programs were taking place as major questions still loomed about GDS program implementation, airline content in nonpreferred channels and lack of new inventory agreements between American and Sabre as well as between Delta and Worldspan.

In a switch of positioning that probably reflected heated competition, Sabre came around to Galileos way of thinking, offering contract amendments for participation in its Efficient Access Solution that call for a program fee instead of an incentive reduction per se.

However, the economics remain the same regardless of the terminology. Agencies in EAS -- and this varies from agency to agency -- agree to pay Sabre a program fee of up to 80 cents per segment.

Regardless of how the calculations are made and fees tallied, EAS takes a huge chunk out of agency incentives, although agencies will receive a minimum 20-cent incentive per segment.

Galileos Content Continuity Program employs similar economics, although apparently there is no 20-cent floor.

Both Sabre and Galileo declined to speak publicly about the process by which they will charge agencies these program fees.

Nomenclature change

Sabre Travel Network spokeswoman Kathryn Hayden called references to a program fee a change in nomenclature and a nonevent that changes nothing about EAS or its mechanics.

The adjusted financial terms associated with our program, and other programs in the market, have been referred to in different ways, from incentive reductions to charges to fees, Hayden said. In some cases we had been referring to the adjusted terms with different customers in different ways based on the terminology the customers seemed to prefer.

While the result is the same no matter the terminology, we realized this might cause some confusion, so we just decided to simplify and make our program as clear as possible.

Travelports David Falter, president of Galileo in the Americas, said the CCP was not related to the incentives we pay our customers and was instead about content and protecting agencies from airline service fees.

We feel that it is important to offer a choice to our customers, thus the fee to participate in our optional program, Falter said.

Sending checks to the GDSs

Galileo was telling some agencies that a program fee would appear as a line item in monthly invoices and that the fee would be reflected when agencies received their incentive checks, which often occurs on a quarterly or semiannual basis.

Many Apollo/Galileo agencies have unbundled contracts that contain charges for services such as ticket and invoice printers, and terminal addresses.

Gay said that with the new CCP program fees and with charges for other services in unbundled contracts, some agencies were appalled at the prospect that they would have to send Galileo checks instead of the converse because of the incentive hit.

The Worldspan Super Access Product, meanwhile, is believed to come with zero incentives as a base, although the company negotiates the programs terms individually with agencies.

Worldspan last week requested that its agency customers decide by Aug. 18 if they want to participate in the Super Access Product or Subscription Access Product, TravelWeekly.com has learned.

Worldspan is in a somewhat different position than Galileo and Sabre, because all of Galileos Apollo agencies in the U.S. and the vast majority of Sabre agencies are automatically enrolled in CCP or EAS, respectively.

Along with the announcement of the new optional products, you received a contract amendment that allows you to make your product choice, Worldspan told its agency customers.

We encourage you to return the amendment no later than Aug. 18, or sooner, to ensure your selection is processed and in effect prior to Sept. 1, 2006.

Aug. 18 is not a fixed deadline, however, and Worldspan-connected agencies can opt-in to either product at any time, according to spokeswoman Erin Hadaway.

Sabre plays tough

Sabre apparently is taking more of a hardball approach to participation in EAS, informing agencies that if they are non-participants on Sept. 1 then entry into EAS will be at Sabres discretion.

A major factor contributing to Sabre agency angst is the GDS lack of a participation deal with American Airlines.

As of last week, American Airlines and Sabre were not talking. That was surprising since the booking fees that American pays to Sabre soared beginning Aug. 1 because its prior Direct Connect Availability-3 contract expired on July 31. 

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