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AA Signs Worldspan Content Deal, Carriers Fight Sabre/Amadeus Pact

By Jay Boehmer / April 02, 2006 / Contact Reporter
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American Airlines last week announced that it had signed a distribution pact with global distribution provider Worldspan, through which the GDS will access full American airfare content for five years.

The agreement—to be implemented by August—is the first Direct Connect Availability agreement signed by the largest domestic carrier in a deregulated GDS environment.

In a statement, American said content covered by the deal comprises "all published fares that the airline sells through AA.com, any third-party Web site or other distribution system, as well as private fares, where applicable."

David Cush, American Airlines senior vice president of global sales, last month said the carrier still was negotiating contracts with all GDSs. However, the carrier recently became embroiled in a dispute with Sabre and Amadeus following an agreement that allows each GDS to leverage the other to access nonparticipating carriers' fares.

The move prompted American to question the legality of the new agreement and put the matter under the legal department's microscope. At the time, Cush said American would continue discussions on contracts with Sabre and Amadeus, while its legal department explores other options (BTN, March 20).

Continental last week in a memo to corporate clients and travel management companies joined American Airlines in denouncing the deal. In the memo, Continental senior vice president of worldwide sales Dave Hilfman told clients that the carrier had not been able to see the agreement between the two GDSs, but its contracts with the distribution players "do not allow them to share fare, schedule and inventory information between them."

The memo stopped short of threatening legal action. "We will take the appropriate actions necessary to protect our 'content' if it is used by any GDS company without our permission," Hilfman noted in the Continental memo. "We don't want you to be without our content on these systems, of course, but the GDS companies need to supply it to you in a legitimate way. We don't want you to be misguided into thinking that the announcement made by Sabre and Amadeus resolves the uncertainty about the availability of our content on these systems if there are no contracts with Continental."

Hilfman said in the memo that Continental continues to work on new agreements with all GDSs, yet only would sign if the carrier can secure "significantly better economics in our new agreements"—a pursuit shared by carriers as they renegotiate distribution contacts set to expire this year.

"It is our sincere desire to be 'on the shelf' in every GDS," the memo said. "The fact remains, however, that there is a real possibility we will not reach agreements with every system and, because of this uncertainty, we suggest you explore other sources of Continental's content to plan in advance for possible interruption of availability of Continental's content on systems that you use."

The GDSs positioned the agreement as a safety net to ensure clients have access to potentially unavailable airfares, but said they have yet to execute the agreement, nor will they if negotiations with carriers go as planned.

Travel management companies, travel managers and corporate travel associations generally favored the agreement.

Caro Cook, chief of transportation at the International Monetary Fund said that if the deal between Sabre and Amadeus were applied, "Travel managers would love it and airlines will hate it."

However, one travel management company owner likened the deals to codeshare agreements among carriers. "Know any GDS companies that have a similar arrangement with their friendly competitors? Or maybe that's what Mr. Hilfman fears would happen if two GDS companies did the same thing in their industry as Continental, United, Delta and the rest of the legacy carriers did in the airline industry."

Many carriers are in the midst of renegotiating GDS contracts and several have threatened to withdraw content from GDSs that don't meet their terms.

While Worldspan and American did not disclose the details of the deal, Cush in a statement said, "This agreement achieves American's important business objective of decreasing our distribution costs, a critical factor for American going forward as we continue to drive towards more efficient operations throughout our business, while also providing valued Worldspan travel agents with access to our comprehensive content."
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