Delta Air Lines and Sabre have reached a new multiyear "value-based"
distribution agreement in which the carrier and global distribution system will
work together on improving indirect distribution channels.
Delta managing director of global distribution Jeff Lobl
called the new agreement an "industry-first, leading commercial
model" that would help "make everything possible in indirect channels
that we do in direct channels today." He said it was a necessary move away
from the traditional GDS commercial models that only "entrenches the
status quo."
"Our intention is to unlock innovation and reward
investment," Lobl said. "The objective is to elevate the customer
experience so that it's every bit as strong as in our direct channels."
While not divulging the exact details, Lobl said the
agreement moves away from the traditional GDS economic model, in airlines pay a
flat fee to GDSs for each segment. Instead, compensation will be more
reflective of the value of what is being sold, he said.
To better provide differentiation in what is sold, Sabre launched
its New Airline Storefront in late March via API and in limited release to
agencies via its Sabre Red 360 platform. The display, on which Delta
collaborated with Sabre, organizes airline offerings into "shelves"
displayed side-by-side, making it easier to see and compare various
restrictions and benefits included with airfares.
Erik Magnuson, VP of product management, mobility and
payments for CWT—which also collaborated in development of the new
storefront—said it was an example of "collaboration across the entire
ecosystem" that Delta and Sabre hope to do more of with their new
agreement.
Financial terms and length of the agreement were not
disclosed, but Sabre Travel Solutions chief product officer Wade Jones said it
could potentially serve as a model to future agreements with other carriers.
"The GDS is seen sometimes as a channel of friction,
but this is about expanding the pie," Jones said. "It's important to
think about the value combination among many things: the quality of the display,
economic alignment, and all of those things in concert together."
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Editor's Note: This story was updated Monday, May 3 at 9:54am Eastern Time