Cendant-owned Galileo today indicated it would shy away from following Sabre's lead in charging travel management clients for full airline content, labeling the rival GDS's announcement "disappointing."
"We continue to believe that cost-shifting is not an ideal outcome for our industry," Cendant said in a statement. "If there is a structural change in the market, we will ensure—as we always have—that our customers have full access to content and all related advantages in the market."
Cendant's response came on the heels of Sabre's plan to redefine agency/GDS models through an optional fee-based program that gives its U.S.-based global distribution subscribers access to full airfare content and immunity from airline service charges
(BTN, June 7).
"We are monitoring this and other industry developments with great interest, and watching both competitive and industry reactions to these announcements," Amadeus said. The GDS, which has yet to sign a major U.S. carrier following GDS deregulation, said it remains in discussions with carriers for full-content deals. "Our objective continues to be to ensure long-term outcomes that would be amenable for the airlines, for us and for our travel agency customers."
Although Worldspan would not weigh in on Sabre's opt-in model, sources said the GDS likely would employ a model similar to Sabre's when it launches two new optional products later this summer.
"Each of the GDSs has different marketshare considerations," said executive vice president of CWT North America Mike Koetting. "Cendant also has the consideration of being for sale. Each of the GDSs has different motivations that may guide their behavior in altering distribution channel economics."
Although Sabre today said it plans to enact its optional program—dubbed Efficient Access Solution—on Aug. 1, Jack O'Neill, COO of CWT North America, today said that many travel management company contracts will expire after the start date and those that opt in may not employ the new model until later this year or next. "Most of the major TMCs and the travel management community at large have different terms and timing of when the agreements expire," O'Neill said. "I think most of them were reworked as three- to five-year deals after the DCA3 agreements between airlines and GDSs. The next wave after the GDSs and the airlines—for those airlines that are going to participate in GDS agreements—will be the travel management community and the major TMCs."
The following wave, said CWT, is likely to crash on buyers. "Corporate travel managers are smart enough to know that no matter how it's positioned and how many channels it has to work its way through, this is ultimately a price increase for corporations and their travelers," said Koetting.