Sabre to drop AA coverage

Jan 5th, 2011, 09:24 AM
  #1  
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Sabre to drop AA coverage

Sabre, one of the big GDSs (global distribution systems) has announced it will cease including AA flights in its data base as of August. Ironically, Sabre used to be owned by AA.

Sabre hasn't said if AA coverage will be dropped by Travelocity (which Sabre owns) but if so, that would mean AA would be missing from all of the "big 3" online TAs, Travelocity, Expedia and Orbitz. Orbitz is owned by Travelport, one of the other big GDSs. Basically, AA wants to cut out the GDS "middle men" in on-line bookings. Expedia/Orbitz/Travelocity use the GDSs to access AA fares and availability, for which the GDSs charge a fee to the airline. AA doesn't want to pay it; instead AA wants the agencies to use AA's own "Direct Access" distribution channel, thus capturing that revenue.

So far it looks like 2011 is going to be a real watershed year in terms of online booking of tickets using traditional TAs/GDSs. Other airlines will undoubtedly be weighing the same options as AA.

http://www.bloomberg.com/news/2011-0...es-widens.html
Gardyloo is online now  
Jan 5th, 2011, 09:36 AM
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Sorry - minor correction. Travelport doesn't own Orbitz but is the largest shareholder, having spun it off a couple of years ago.
Gardyloo is online now  
Jan 5th, 2011, 09:59 AM
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What I find funny is that, hand-wringing aside, consumers don't care, and the actual impact is likely to be limited. How long has Southwest managed to control distribution of their tickets? Amazingly, they enjoy an enviable consumer reputation and do not appear to have suffered financial difficulties as a result.

My suspicion is that these moves will simply accelerate traffic toward the aggregator sites, like Kayak, unless the legacies decide to go for the full Southwest treatment and refuse to allow those sites to display their fares (or at least refuse to pay the click-through money upon which they depend). Frankly, I suspect that Orbitz, etal will be forced to swallow their pride and play ball.
travelgourmet is online now  
Jan 5th, 2011, 05:08 PM
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I always book directly with AA anyway so no big deal for me.
bettyk is offline  
Jan 6th, 2011, 04:29 AM
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These new exclusions are real hassle for me already.

I go on one screening site one or more carriers are missing

forcing me to deal directly with the airline sites.

The whole point of it I suppose but quite anti-competitive.

More will be revealed...
qwovadis is offline  
Jan 6th, 2011, 06:57 AM
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In my view this is basically a "paradigm shift" (to use an innovative term) .

The GDSs are holdovers from the days when you bought airline tickets through "brick and mortar" travel agencies or on the phone. The TAs knew the arcane GDS "languages" (and believe me, "arcane" isn't even close) and paid hefty monthly fees to Sabre or Apollo et al for the privilege of serving as the travel industry's gatekeepers. TAs got commissions from the airlines, and kickbacks from the GDSs, with the costs being buried in your price-controlled ticket.

The simultaneous advent of deregulation and widespread home computer literacy was ultimately a knife to the heart of this setup. Airlines (and hotel chains) discovered that they could discontinue paying commissions to TAs with no noticeable drop in business, and now they're discovering (thanks, Southwest) that you can cut out the skim from the GDSs too. Sabre and Amadeus et al can fight back, and it will be disruptive to some airlines and to parts of the market in the short term, but IMO the writing has been on the wall for years - we don't need a priestly class of TAs, even if they're very widespread like Expedia and Orbitz. You can just go to services like Kayak, who can access the airlines' own data bases, bypassing the GDSs, so that when you click through on AA you go to aa.com, rather than the front end of some GDS (as with, e.g. Travelocity, which is a subsidiary of Sabre.)

We all know how the airlines are all lemmings. If AA succeeds in getting more of its sales traffic to come to AA.com, it will be the thing to do, and other airlines will do the same, instantly. If that happens it's time for a new business model at Expedia and Sabre.
Gardyloo is online now  
Jan 6th, 2011, 07:29 AM
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Bad timing, however, for AA. They had a lot more clout a few years back when they were the largest network airline. Now, they're #3 among the "big 3". Big portion of their business is business-flying, and they have to get their corporate customers to not use the GDS. Maybe they will be able to do so eventually, but will likely lose a significantly portion of their business in the process.

For example, take Fodorite TxTravelpro. She just posted a couple weeks ago about her company not letting them fly AA, even though she lives in the Metroplex. Now, she's flying ERJs to IAH to connect.
rkkwan is offline  
Jan 6th, 2011, 07:39 AM
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I think the timing was intentional on both sides. AA's contract with Sabre was due to expire later this year anyway, and AA's rapid development of Direct Connect, along with its work with H-P on other systems development, shouldn't have left any doubt with the GDSs that this was AA's direction. As you know, Delta is also fooling around with its GDS relationships, and presumably the assumption is that UAL will be so preoccupied with digesting Continental that the whole arena of legacy airline corporate contracts - both on the retail and back office side - is in for a lot of clear-air turbulence this winter. I think AA is just pulling off the band-aid quickly.

But we shall see. Interesting days.
Gardyloo is online now  
Jan 6th, 2011, 07:54 AM
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I'm not sure that the corporate stuff will take too big of a hit. One of the other articles noted that Expedia's corporate arm was to continue offering AA flights, presumably by going through the new AA system. At the end of the day, I suspect that AA's business travel share will rise or fall based on corporate agreements, rather than whether they are on or off a GDS.

As for TxTravelpro's experience, I would note that carrier prohibitions are not uncommon, so it isn't clear that it need be related to this little spat. My wife used to work for a Fortune 50 company that strongly discouraged flying on Continental and one other airline (AA?), going so far as to include this in their travel policy. My company doesn't have any carriers currently blacklisted, but we did have BA on a blacklist a couple of years ago.
travelgourmet is online now  
Jan 7th, 2011, 06:57 PM
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It's interesting to note that SABRE was built by American Airlines in the first place, way back in 1957. It was initially their own system, and the first of its kind, but they later expanded it to travel agents and other airlines. Later still, they sold it. And now, they're back to their own system again. History repeating itself, sort of.
AnthonyGA is offline  

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