<B>InsideTrack</B>
<B>As GDS pricing Rises, Worldspan Halves Online Fee</B>
Worldspan as of Jan. 1 will charge suppliers $1.95 for corporate online bookings with the exception of those made by users to whom Worldspan pays productivity pricing credits or other incentives. The fee is about half of what suppliers pay today, Worldspan said, which averages $3.92. Worldspan also restructured its matrix of overall airline pricing for 2001, including a 4 percent increase for some bookings. "We raised fees in certain segments reasonably in line with, though lower than, some of our competitors," said Paul Blackney, Worldspan president and chief executive officer. Earlier in the week, Galileo announced an average 6 percent increase in airline pricing for 2001--its highest increase since 1992. Amadeus also increased airline pricing, by an average of 6.9 percent, and said it will begin billing based on the U.S. dollar rather than the euro everywhere except in Europe, the Middle East and Africa. Northwest Airlines vice president of distribution planning Al Lenza said the currency change could raise GDS costs by as much as 20 percent for certain airlines. Commenting on Galileo, Lenza said,"It's more greed. Galileo's volume has declined and they're trying to make up that shortfall with rate. We will work 6 percent harder to support Internet direct efforts." Sabre plans to announce its 2001 pricing early this month, with a focus on channel-based pricing options. Sabre already offers airlines a discounted fee for BTS bookings through BTS. Worldspan's initiative, called Corporate Online, replaces its recently introduced CorporateDirect program in which airlines that helped Worldspan sell the Trip Manager system were charged lower fees for bookings in it (BTN, Oct. 2). "It needed to be bigger," said Blackney. "The programs already in place didn't excite the buyers and suppliers very much." In its letter to airlines, Worldspan wrote, "Clearly, it is in your airline's interest to advocate the adoption" of corporate booking tools.
<A NAME="2"><B>Chase Buys Paymentech's Card-Issuing Subsidiary</B>
Chase Manhattan Corp. late last month agreed to purchase the operations of the commercial credit card-issuing subsidiary of Paymentech, based in Salt Lake City. The transaction, which includes a commercial card portfolio totaling approximately 230,000 cards and $200 million in receivables, is expected to close in the first quarter of 2001, pending regulatory approval. Terms were not disclosed. "This strategic purchase brings us the industry's first robust Internet-based administration and reporting platform, PaymentNet, and it also brings us the people necessary to take full advantage of one of the fastest growing segments of the payment systems industry," said Richard Srednicki, executive vice president of Chase's credit card business.
<A NAME="3"><B>TWA Solicits Corps., Links With AWA</B>
Trans World Airlines chief Bill Compton earlier this month sent a letter to Missouri corporations, offering enhanced mileage-based incentives in exchange for corporate business. The offer is the latest effort put forth by TWA to attract high-yield business travelers and corporate clients in order to survive through financially turbulent times (BTN, March 17, 1997). The carrier said the incentive program is "a private offering to an exclusive group of corporate Aviators members." Aviators is the carrier's branded loyalty program. Meanwhile, expanding on an existing marketing agreement, America West Airlines and TWA announced a comprehensive codeshare pact. Subject to government approval, the two carriers early next year will make available more than 500 jointly coded flights to 145 North American cities.
<A NAME="4"><B>DOJ Oks Continental, Northwest Agreement</B>
The U.S. Department of Justice last week approved a definitive agreement reached earlier between Continental Airlines and Northwest Airlines, ending the government's antitrust case against the nation's fourth and fifth largest carriers. Under the terms of the deal, Continental will repurchase 6.7 million of its Class A shares held by Northwest since 1998 for $450 million in cash. Northwest loses its controlling stake, but will retain 2.6 million shares of Class B stock, or about 5 percent of Continental's outstanding common stock. The agreement, preliminarily reached Nov. 7 after the start of the antitrust trial, also extends the two carrier's domestic alliance through 2025 (BTN, Nov. 13). Northwest retains the right to block transactions between Continental and other major carriers throughout the alliance agreement, barring changes in control of Northwest. The two carriers expect to close the agreement in about two months, which will adjourn the federal suit.
<A NAME="5"><B>Alfred Kahn To Keynote Masters Program</B>
The ninth annual Masters Program, Feb. 6 and 7 in Washington, will feature the father of deregulation Alfred Kahn, Northwest COO Richard Anderson, Expedia CEO Richard Barton and agency heads Bruce Black of McCord and Hal Rosenbluth. Northwestern Travel's Art Dahl chairs the 2001 gathering of the industry braintrust. For more, call (202) 775-5818.