The Sabre Travel Network in the coming months will begin offering a menu of value-based pricing options for suppliers participating in the Sabre global distribution system, a direction conceptually similar to one taken this year by GDS operator Amadeus. Following the U.S. Department of Transportation's move to deregulate the GDS sector this summer, "we can now base pricing on a variety of factors," said Sam Gilliland, president and CEO of Sabre Holdings, in a conference call today with analysts. "Airlines will be able to choose based on their own characteristics."
Gilliland said such factors could include an individual airline's share of bookings routed through the GDS, its orientation as either a short- or long-haul carrier and elements that relate to incentive payments. He also noted that an airline's use of Sabre's other products-including reservations systems, hotel inventory available on airline Web sites via Sabre's Travelocity unit and other services-also could factor into individualized pricing models.
Sabre already is in discussions with several airlines about the new pricing options, which could be introduced during the latter half of 2005. Gilliland acknowledged that "rekindled interest" in GDS alternatives drove Sabre to develop new models, which the company began exploring 18 months before GDS deregulation took effect.
Amadeus' 2004 pricing options included a tiered approach that levies different fees dependent on the type of booking, with intercontinental premium bookings incurring larger fees than standard domestic ones, for example
(BTN, Dec. 8, 2003).
"It was the first step in a move to recognize differentiated value of airline services," said Amadeus vice president of marketing Ian Wheeler, in a
BTN interview last month. "We intend to maintain that type of approach with more changes to be announced during the back end of November." Wheeler said customer feedback has been positive but he did not divulge which airlines had adopted the new model, which went into effect Jan. 1.
Spokespersons from both Worldspan and Cendant Corp.'s Galileo, the other two primary GDS operators in the market, at press time were not available for comment. Galileo in early 2004 said it had altered pricing to better reflect revenue and costs generated by a given airline transaction
(BTN, Jan. 19).
Meanwhile, Sabre said Travelocity had turned a profit for the second consecutive quarter and that Travelocity Business had signed Aetna and "another Fortune 100 account" to its corporate travel management services. The company also said GetThere had "another record-breaking" performance in the third quarter, in terms of corporate booking volume.