Let the [passive segment] games begin! Travelport sets the bar at $3.75

Travelport just sent out this notice:

Important Travelport Policy Update Regarding Passive Air Segments

August 16, 2011

Travelport’s strategy is to be the leading provider of informed travel choice by aggregating the widest
possible depth and breadth of travel content and making it fully available to search, shop and book.

To reflect this ongoing investment and the value created by the use of Travelport systems to manage
PNRs that contain segments originated outside a Travelport system, effective November 1st, 2011, PNRs
that include passive air segments above a defined agency baseline will be subject to a US $3.75 GDS
processing fee:

Using data from July 1, 2010 through June 30, 2011, Travelport will determine for each U.S. subscriber its Passive PNR Percentage by dividing the subscriber’s total Passive PNRs by the subscriber’s total PNRs. Passive PNRs include those created manually by the subscriber or through the use of a third party automation booking tool.

Travelport will increase each U.S. subscriber’s Passive PNR Percentage by 5%, with the resulting figure becoming the subscriber’s baseline of non-chargeable Passive PNRs in any given calendar month.

Each calendar month, Passive PNRs in excess of the baseline are chargeable. Bookings made via a supplier direct connect or supplier website and stored in a Travelport system are common examples of air passive segments that, above the baseline, are subject to the GDS processing fee. Accordingly, U.S. agencies continuing to book via a Travelport system will maintain maximum agency efficiency and revenue.

Learn more about the new policy or contact your Travelport representative with any questions.

In case you are not aware, a passive segment is in essence a “dummy” segment that an agent enters into their GDS to reflect a booking made outside of the system.  This can be a booking made by phone, one made on a web site or on an alternative GDS or other booking tool.  This is done by an agency in order to be able to transfer that information to the other systems necessary for their operation – quality control, policy compliance, security/traveler tracking, ticketing, accounting and reporting systems.

Passive segments are not billable to the airline, but most agency contracts have some clause that governs the number of passives that are allowed in the normal course of business.  Some agencies and Travel Management Companies (TMCs) pass the passive segment fees onto their corporate clients.

Bottom line, the shift in distribution being led by American Airlines in their battle with the GDS companies is not free.  Someone has to pay and once again, it looks like the agencies are being targeted to bear the brunt of the cost.

The GDSs are clearly not going down without a fight.  The bar has been set.  Let the games begin.

Stay tuned.

2 thoughts on “Let the [passive segment] games begin! Travelport sets the bar at $3.75”

  1. In the past, passives have definitely been billable.

    But in the current round of negotiations, this is a major issue, due to the contemplation of "GDS bypass" or "Direct Connect" technologies being used.

    Not only do airlines have to consider how they will handle this issue, but so do agencies and TMCs, as they have had limits designated in their GDS agreements as well.

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