Inside Track - 2005-11-14

Sabre Cracking Down On Passive Segments
To prevent "increasing incidents of improper use," Sabre Travel Network on Dec. 1 will revise its policy regarding non-billable passive segments coded as 'YK.' "If the travel content is available in the Sabre system, the YK policy does not allow for booking the content through another application and using YK segments to manage the passenger name record," the company said. "If the travel content is not available in the Sabre system, YK segments are allowed for that content only and only if the agent utilizes an authorized application to make the booking." Sabre's GetThere DirectCorporate and GetThere DirectMidMarket booking tools currently are the only such authorized applications. In the coming months, STN will evaluate other tools for potential authorization. A limited temporary exemption conditionally permits other applications to handle non-Sabre content within the Sabre system, including those furnished by Agentware, Amadeus E-Travel, Datalex, Outtask, Rearden Commerce, Travelport and TRX.

Bankrupt Independence Air Seeking Bidders
Independence Air parent FlyI is requesting a bankruptcy-court-supervised 60-day auction process in which interested parties would bid on all or parts of the company's assets. "If there is no interest expressed during this process, the final step could be to discontinue operations," the airline warned on its Web site. The Dulles, Va.-based company last week filed for Chapter 11 protection after months of deteriorating financial performance. It said it would continue normal flight operations, honor existing reservations and preserve its frequent flyer program. After scaling back during the past few months, Independence Air operates 220 daily flights to 36 destinations with a fleet of Airbus aircraft and regional jets, and has no plans for more network or schedule reductions. "Due to uncertainty of a possible forced liquidation, we believe this filing could drive away passengers and revenue," said Calyon Securities analyst Ray Neidl. "The beneficiaries of a retreating or shrinking FlyI would be carriers with concentrations along the eastern seaboard, including AirTran, Song, JetBlue, Southwest and US Airways."

NWA Pilots Voting On Concessions
Bankrupt Northwest Airlines last week announced it had reached interim labor cost savings agreements with both the Air Lines Pilots Association and the Professional Flight Attendants Association, as well as two smaller labor groups. ALPA's Northwest members through today have been voting on their deal. If the rank-and-file does not ratify, Northwest would file a motion in bankruptcy court to secure wage and benefit reductions. NWA, also negotiating with both the Transport Workers Union of America and the International Association of Machinists and Aerospace Workers, has filed a Section 1113(e) motion in bankruptcy court to secure wage and benefit reductions. A hearing on that motion is scheduled for this week.

Golden Gate To Acquire Geac
Geac Computer Corp.—the Canada-based software provider and acquirer of expense reporting company Extensity—last week said it is on the other side of an acquisition, this time at the hands of Golden Gate Capital, which is putting up $1 billion for the company. The companies last week said the deal, which gained unanimous approval from Geac's board, is expected to close in the first quarter of 2006. "Upon completion of the acquisition, Geac will be reorganized into two separate Golden Gate Capital portfolio companies," David Dominik, managing director of Golden Gate Capital, said in a statement. One company will sell and operate industry-specific software and services, while the other—which includes the expense reporting component—will comprise a "financial applications" business. Following its acquisition of Extensity, initiated in the fall of 2002, Geac integrated the company with other offerings in its Performance Management suite and rebranded the Extensity component Geac Expense Reports.

Blackstone Group To Buy La Quinta
The Blackstone Group last week continued on its path of hotel acquisition with an agreement to purchase La Quinta Corp. and La Quinta Properties Inc. The parties value the deal at $3.4 billion and, subject to regulatory and stockholder approval, expect it to close during the first quarter of next year. Dallas-based La Quinta operates and franchises more than 590 hotels in 39 states in the United States and in Canada and is one of the largest owner/operators of limited-service service hotels in the country. La Quinta brands include Baymont Inn & Suites, La Quinta Inns, La Quinta Inn & Suites, Woodfield Suites and Budgetel.