NEW YORK -- Galileo and Sabre followed Amadeus lead and will
offer mix-and-match airline pricing plans in 2005.
Worldspan, meanwhile, wont divulge its GDS booking-fee
plans.
In the first round of GDS pricing revisions since GDS
deregulation in July, it is clear that uniform airline pricing is
gone. Many airlines that dont have locked-in discount deals or
large volumes will face booking-fee increases.
Amadeus instituted tiered pricing in 2004 and tweaked the plan
for 2005. It appears that Sabre and Galileo have similar plans.
Galileo wouldnt offer many specifics. But, Ken Esterow,
executive vice president of supplier services for Cendant Travel
Distribution Services (TDS), said, "We have continued to refine our
methodology to better link our pricing to value and costs."
He said the pricing impact will vary by carrier, with some
paying more for bookings and others seeing "no material
change."
"In fact, in many regions we have continued to leave the base
segment fee unchanged," Esterow said. "It is some of the premium,
value-creating services that have been impacted."
Esterow noted that Cendants TDS will offer airlines a menu of
services, making customized deals by offering services or content
from Cendant brands.
"The important point is we are no longer just a GDS, we are a
travel distribution service. GDS pricing is but one component of a
very multifaceted set of airline relationships" that involve
Orbitz, CheapTickets and other outlets, as well as the lodging and
car rental brands, he said.
Sabre, beginning Jan. 1, will implement an average price
increase of 2.3% for global direct bookings, but the increase will
be higher for some airlines that do not have Direct Connect
Availability (DCA) agreements, which offer booking-fee discounts in
exchange for Web-fare access.
With most of the DCAs running through mid-2006, the 2.3% average
increase translates into considerably higher price hikes for most
airlines.
Sabre, too, will make different pitches to various airlines,
taking advantage of "increased flexibility to offer different
pricing models and different options to airlines," a spokeswoman
said.
Sam Gilliland, Sabres chairman and CEO, said the company will
offer airlines a "menu of options" and "gear value toward the
characteristics of the airline," such as whether segments are
long-haul or short-haul.
In its pricing deals, Sabre can leverage Travelocity and its
ability to offer airlines hotel-booking capability on their Web
sites, the GDS "breadth of distribution" and airline hosting
services, Gilliland said.
Sabre will negotiate new agreements with airlines participating
in DCA, Gilliland said, with US Airways agreement expiring in
October 2005.
One industry observer whos been an insider on airline-GDS
pricing negotiations, said the "flexible schemes will mean price
increases for somebody."
He said GDSs are proceeding with price increases for some
airlines in a "carrot-and-stick" approach.
"They need to show people if you dont sign special agreements,
there will still be price increases," the source said.
To contact
reporter Dennis Schaal, send e-mail to [email protected]