Inside Track: AA Still At ImpassE With Sabre

AA Still At ImpassE With Sabre
American Airlines late last week said it remains at a standstill with Sabre and has no scheduled meetings with the global distribution system as they approach the Sept. 1 expiration of their content agreement. Charlie Sultan, American's managing director of sales planning and analysis, said there are "two issues that Sabre's unwilling to compromise on, so we've have no discussions since prior to the NBTA conference." The first are clauses that would not allow American to push customers to non-Sabre channels, while the second revolves around use of passenger name record data. Sultan noted exclusivity clauses that he said are "protectionist" to the Sabre GDS. "They pretty much wanted a clause in the contract that said we would not do anything to move any booking off of Sabre for the five-year term of the agreement, despite what other economics we could get elsewhere." American also is concerned that Sabre will sell PNR data to competitors, noting that the GDS approached the carrier last year offering to sell them data from other carriers. "Sabre, on the other hand, has a whole department of people focused on how they can exploit the data that is running through their system. They came to us with a joint venture about a year ago called Vistrio. What they were showing us was all this data that they would slice and dice for us to, in essence, provide us with a list of any carrier's frequent travelers, their names, their addresses, how many times they flew, what markets they flew, what OMDs, what agency they booked through." Sultan said, "We've made it clear to Sabre that we have no interest at all in other supplier data, nor do we have an interest in more passenger data beyond what we need to run the operation." In response, a Sabre spokesperson said, "Our goal is to protect information, not sell it." Sabre would not comment on specifics of negotiations with American, but the spokesperson said, "What we continue to push for in our agreement with them is the same terms that seven other airlines have agreed to and that's focused on a very comprehensive definition of full content as well as the protections." According to a recent Business Travel Coalition white paper, "The PNR issue amounts to Sabre not wanting to make it easy for American to pursue strategies designed to pull consumers away from the GDS. On the other hand, American would appear to want the data to facilitate efforts to pull consumer spending through less costly channels and increase yields, which of course is detrimental to corporations' consolidated travel program strategies."

DOT Seeks To Revoke IATA Antitrust Immunity
The U.S. Department of Transportation last month proposed withdrawing antitrust immunity from "tariff-coordination meetings" held by the International Air Transportation Association that set passenger interline fares and cargo rates for transatlantic and other flights. DOT said revocation of immunity would "enhance competition and provide lower fares for consumers flying internationally."

Vanguard Files For Initial Public Offering
Vanguard Car Rental Group, parent of the National Car Rental and Alamo Rent A Car brands, will be selling up to $300 million in common stock as a part of an initial public offering the company filed for earlier this month. The number and price of shares has not been specified yet. Vanguard plans to use the proceeds to pay off part of an $800 million loan and for general corporate purposes, the company said. With this move, the car rental industry is poised to have all of its major players with the exception of Enterprise Rent-A-Car as public companies that are not a part of a larger business unit, which will offer more insight into the companies' financial performance. Following its separation from Ford Motor Co., Hertz Global Holdings filed for a $1 billion IPO last month (BTN, July 31). Cendant Corp., parent of the Avis and Budget brands, could complete the spin-off of its car rental business into its own company in the coming months. The Dollar Thrifty Rental Group already is a publicly traded, solely car rental company.

SEC Mulls SOX Deadline Delay For Smaller Companies
The U.S. Securities and Exchange Commission has proposed a one-year delay for smaller and some foreign companies to comply with Sarbanes-Oxley reporting requirements, the agency announced last week. SEC will consider comments on the proposal through Sept. 14. The reprieve would affect small and midmarket companies and companies newly going public, including foreign private investors listing on a U.S. exchange for the first time. "It's certainly positive from that segment of the industry's perspective," said Mark Walton, principal of Deerfield, Ill.-based Consulting Strategies. A report by the Government Accountability Office earlier this year indicated that companies with $700 million or less in market capitalization were seeing disproportionately higher audit costs in meeting SOX requirements that require specific financial reports, including auditing on travel and entertainment spending.