American Airlines this week alerted agency and corporate customers that beginning in September it would charge $3.50 per segment on transactions booked through nonpreferred distribution channels, which, barring new agreements, include Sabre and Amadeus.
Following American's move, Galileo, which is among the GDS operators that have struck new content deals with American Airlines and are among its preferred distributors, introduced an opt-in program that it said protects subscribers from new airline booking charges, while providing "full content." In introducing opt-in programs, the GDS follows Sabre's move last month when it launched a fee-based program that assures full content from its signed carriers, while offering immunity from any new service charges they may introduce
(BTN, June 19).
American's current DCA3 deal with Sabre is set to expire at the end of this month and, if a deal is not reached by that time, the carrier and GDS would operate under a 30-day extension as they work to strike new terms
(BTNonline, July 6). An American spokesperson said, "We are not in current discussions with Sabre" on the GDS contract. Yet, Sabre said it would continue to work with American on securing content.
American's Source Premium Policy segments distributors into two categories: Competitive Booking Sources and Other Booking Sources. Competitive Booking Sources include the Galileo system, one of two optional products forthcoming from Worldspan, as well as alternatives G2 SwitchWorks and Farelogix. Angering travel agencies and corporate clients, the carrier said customers electing to use other distribution sources "will be required to bear a portion of the cost of content distribution via these sources."
If new terms with are not forged with Sabre or Amadeus, American said it would submit monthly invoices to agencies, which will tally the $3.50 charges applied by booking segment, "including passive segments, using the billing data provided to American by the GDS."
Furthermore, American continued threats that it may "withhold content" from nonpreferred channels, "particularly if another booking source fails to display American content on neutral terms as compared with other airlines."
In signing a content deal with American two weeks ago, Galileo bookings are immune from the fees. The GDS said its move to introduce the program is "in response to structural changes underway in the marketplace." The program mimics Sabre's in that U.S.-based subscribers "agree to certain financial terms" for guarantees of full content. Galileo said the program will go into effect Sept. 1, one month after Sabre's is slated to launch and on the same day American Airlines plans to introduce its booking fees.
Sources said Worldspan would follow Sabre and Galileo with a similar opt-in program, as the GDS has noted "two new optional products to introduce into the marketplace." American Airlines' move further fuels the speculation as it plans to impose its $3.50 charge on bookings made through one of the Worldspan products but not the other.
"Worldspan understands that its customers need certain information to make informed decisions," the GDS said in a statement this week. "Given recent market developments, Worldspan has expedited its plans to announce the details of its new optional products and will announce those details late next week."