For the time being, June 1st is not the cataclysmic event that had been predicted, but the engines have not been turned off in this game of chicken, at least not just yet.
This morning, Travelocity (powered by Sabre) still has AA prominently displayed and the travel management companies that we serve still seem to have AA availability displayed using the normal algorithms in native Sabre.
So what does that really mean?
- Negotiations between AA and Sabre (which prior to today had been mandated by a District Court in Ft. Worth TX) are apparently still underway.
- Unless you are a fly on the proverbial wall in a conference room somewhere in Dallas or Southlake, TX, we can’t tell how far away or close the two parties are to resolving their differences.
- From the Department of Justice side, they simply want to ensure that no one company has a monopoly on the market. If there is no choice, that is not good.
- From the airline side, the rhetoric is largely about “technology” and the inadequacy of the legacy GDS environment, but we are all aware that the per segment booking fee model and revenue sharing with agencies are also key issues. AA believes Sabre has a monopoly. By the way, they also believe Travelport has a monopoly with Worldspan, Apollo and Galileo. The airlines (with few exceptions) participate in all of the GDS systems because they want access to all of their agency clients.
- From the GDS side, their position is that they are not just a pipe, connecting Airline A to Agency B. Anyone can do that (as witnessed by three GDS New Entrants in the last decade that built airline direct connect systems). The GDS is a network, a franchise of high yield, variable cost professionals that book travel 8 hours a day, 5 days a week (and some beyond that) and their position is that their network of high value demand is worth the fees that are charged. And with three very fierce competitors that are constantly poaching one another’s clients, the GDS would say that they are anything but a monopoly, as both agents and airlines have choice as to who they use for distribution.
- From the agency side, the bulk of agencies simply do not have the IT resources (or cash reserves) to knit together disparate booking systems, no matter how slick, new, fast, or non-legacy they are. What they care about is providing transparent pricing and availability of all services for the airlines that their clients want to fly and they believe they have a right to do that profitably. The large agencies have multiple GDSs, not because they really need them, but largely due to acquiring other agencies with a different GDS or winning a corporate account that was “wed” to a particular GDS or their self-booking tool (such as Sabre’s GetThere).
- From the traveler side, they want to be assured that when they get on an AA flight in Dallas, connecting to Aer Lingus in New York to London, that they won’t have to check their bag again at JFK and that if there is a delay or cancellation on AA, that Aer Lingus will be aware of the connection and have information about the change.