Where American Airlines is--and isn't!
If you want to book American Airlines, you won’t find it on Orbitz. That’s because American pulled out of Orbitz, apparently using the online agency as a pawn in its dispute with Travelport, a travel technology powerhouse that owns two global distribution systems (GDSs) and also owns a big chunk of Orbitz.
You won’t find American in Expedia, either. That’s because Expedia quit displaying American’s fares over the Christmas holidays, saying that it had been unable to reach an agreement with American and called the airline’s strategy “anti-consumer and anti-choice,” saying that American’s “direct connect” strategy (more on that below) makes it harder to compare fares from multiple airlines, which ultimately makes it more expensive to fly.
For a while, you had to look hard to find American in Sabre, until a court order forced Sabre to back down. But now Sabre and American are making nice. They just issued a statement saying that they’ll drop all litigation, at least until June 1, start negotiating again and, for the short term, anyway, will return to operating as they were. Which means, apparently, that now you’ll be able to find American in Sabre the way you used to.
Meanwhile, American is now touting its direct connect victories--one with Vegas.com, another with Priceline. In a counter move, Expedia is touting its own announcement last week that it has signed a new--and GDS-centric--contract with US Airways. The really interesting question is what its deals will be with United/Continental and Delta, four carriers merged into two. When are those contracts up? Expedia, not surprisingly, ain’t saying.
It’s all part of the airlines’ efforts to save money by bypassing the GDSs, thereby eliminating the booking fees airlines pay the GDSs for flight segments booked through the GDSs. Funnily enough, the airlines created the GDSs (American, in fact, created Sabre, oh-so-many winters ago), but spun them off into independent companies years ago.
The airlines hate paying all those fees to their offspring, and successfully negotiated those fees down in the last go-round of negotiations about five years ago. Many of those airline-GDS contracts are coming up for renewal again, creating an opportunity for airlines. They’re trying to shift a lot of that business away from the GDSs and instead use direct connect technology that bypasses the GDSs. They want travel agencies--online, traditional and corporate travel management companies, to connect directly to their res systems, or have consumers book directly with the airlines’ own websites. The airlines say they can market more effectively directly to their customers than through the GDSs, by matching the ancillary services they now offer to customers based on what they know about the customer.
The GDSs vigorously deny this, saying that their technology is completely able to show airlines an accurate picture of the consumer seeking to fly them and show the customer the menu of services from which they can select---as well as what they’ll have to pay for them.
The airlines keep talking about saving costs and marketing better. But what they pointedly don’t talk about is the way the GDSs provide a marketplace in which travel agents, travel management companies and every-day Joe consumers can easily comparison shop, choosing the carrier, the schedule, the services and the price that works best for them.
You won’t find American in Expedia, either. That’s because Expedia quit displaying American’s fares over the Christmas holidays, saying that it had been unable to reach an agreement with American and called the airline’s strategy “anti-consumer and anti-choice,” saying that American’s “direct connect” strategy (more on that below) makes it harder to compare fares from multiple airlines, which ultimately makes it more expensive to fly.
For a while, you had to look hard to find American in Sabre, until a court order forced Sabre to back down. But now Sabre and American are making nice. They just issued a statement saying that they’ll drop all litigation, at least until June 1, start negotiating again and, for the short term, anyway, will return to operating as they were. Which means, apparently, that now you’ll be able to find American in Sabre the way you used to.
Meanwhile, American is now touting its direct connect victories--one with Vegas.com, another with Priceline. In a counter move, Expedia is touting its own announcement last week that it has signed a new--and GDS-centric--contract with US Airways. The really interesting question is what its deals will be with United/Continental and Delta, four carriers merged into two. When are those contracts up? Expedia, not surprisingly, ain’t saying.
It’s all part of the airlines’ efforts to save money by bypassing the GDSs, thereby eliminating the booking fees airlines pay the GDSs for flight segments booked through the GDSs. Funnily enough, the airlines created the GDSs (American, in fact, created Sabre, oh-so-many winters ago), but spun them off into independent companies years ago.
The airlines hate paying all those fees to their offspring, and successfully negotiated those fees down in the last go-round of negotiations about five years ago. Many of those airline-GDS contracts are coming up for renewal again, creating an opportunity for airlines. They’re trying to shift a lot of that business away from the GDSs and instead use direct connect technology that bypasses the GDSs. They want travel agencies--online, traditional and corporate travel management companies, to connect directly to their res systems, or have consumers book directly with the airlines’ own websites. The airlines say they can market more effectively directly to their customers than through the GDSs, by matching the ancillary services they now offer to customers based on what they know about the customer.
The GDSs vigorously deny this, saying that their technology is completely able to show airlines an accurate picture of the consumer seeking to fly them and show the customer the menu of services from which they can select---as well as what they’ll have to pay for them.
The airlines keep talking about saving costs and marketing better. But what they pointedly don’t talk about is the way the GDSs provide a marketplace in which travel agents, travel management companies and every-day Joe consumers can easily comparison shop, choosing the carrier, the schedule, the services and the price that works best for them.