MilesBuzz! - Dispute puts agents 'in the middle'

Can anyone explain this article? :)

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http://travelweekly.com/articles.aspx?articleid=50816
Continental: Dispute puts agents 'in the middle' (04/03/2006)
By Andrew Compart

Continental has joined American in warning agents it might not participate in every GDS and revealed to Travel Weekly that it, too, might consider a fee for agents who use a higher-cost distribution channel.

“That’s certainly a possibility,” John Slater, Continental’s managing director, distribution and e-commerce said.

Continental is negotiating with GDSs to try to reduce fees to about $6 per domestic booking, and if an agency is using a GDS that costs $12 per booking instead of $6, “we’re going to seek to recoup that difference,” he said.

Asked whether agents may feel they are caught in the middle of a dispute between airlines and GDSs -- including the crossfire over the new Sabre-Amadeus shared-content deal -- Slater said that’s a legitimate worry.

Maybe if you posted the information, or included a link that did not require registration, you would have gotten a response from some of the 100 people that have viewed your post.

Thanks for your help

Why? You can't register? Many news sites require registration. I tried to include a link. But could not find the article posted anywhere else. Ever hear of copyright laws? There is a reason you have to register ans pay for some news articles.You can still post enough of an excerpt for people to get an idea of the content and make an informed decision about whether or not they want to register to read the rest of it. If you check forums (such as Newsstand) which cite press articles regularly, you'll find that's what's usually done. It's helpful.

www.bugmenot.com is a useful site for sites that require registration. Here's an excerpt from the article.
Continental: Dispute puts agents 'in the middle' (04/03/2006)
By Andrew Compart

Continental has joined American in warning agents it might not participate in every GDS and revealed to Travel Weekly that it, too, might consider a fee for agents who use a higher-cost distribution channel.

“That’s certainly a possibility,” John Slater, Continental’s managing director, distribution and e-commerce said.

Continental is negotiating with GDSs to try to reduce fees to about $6 per domestic booking, and if an agency is using a GDS that costs $12 per booking instead of $6, “we’re going to seek to recoup that difference,” he said.

Asked whether agents may feel they are caught in the middle of a dispute between airlines and GDSs -- including the crossfire over the new Sabre-Amadeus shared-content deal -- Slater said that’s a legitimate worry.

www.bugmenot.com is a useful site for sites that require registration. Here's an excerpt from the article.

Basically what has happened is that airlines were deregulated back in 1978...fast forward to 2004 and now the global distribution systems (GDS's) were deregulated....the four main GDSs are Amadeus/SABRE/Worldspan/Gailleo. They charge the airlines a fee for distribution and processing of airline tickets through their systems on a per segment basis. At around say $11 - $14 bucks per segment, you can imagine the amount of money the airlines have been paying depending on how many GDS systems they participate in.

Along last year have come the "alternative GDSs" (think ITA) that charge a lot less money on the per segment basis in the neighborhood of what I heard to be .50 to $5 a segment........to connect directly into the airlines computer systems.

Issue number 1: How do the airlines get travel agents who still book (79%) of all airline tickets through the GDSs to switch to the alternatives? >> the airlines have started offering agents/agencies who switch now a share of the pie to go over to these new technologies and abandon the GDSs

Issue number 2: The GDSs are facing competition from the alternatives, what do you do? SABRE and Amadeus have proposed a "sharing" agreement that would share the content now available on the others system....sooooo, if AA pulled out of Amadeus but not SABRE, SABRE would share the AA portion of their distribution system so agents could still book AA on Amadeus. Of course the airlines have gone BALISTIC over this and threatened to take the GDSs to court......

at work :-) will update more in a while

www.bugmenot.com is a useful site for sites that require registration. Here's an excerpt from the article.
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And the Firfox plug-in made logging into this site a trivial "right-click, Login with BugMeNot" action.


If the airlines can negotiate with one GDS to sell tickets for a $6 fee, and others stay at $12, they'll drop the others. This would make their flights not available to those using those other systems, unless they pay to subscribe to multiple GDS's - quite expensive.

In reality, once one moves, they would all have to move, which is why they are fighting it.

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And the Firfox plug-in made logging into this site a trivial "right-click, Login with BugMeNot" action.


If the airlines can negotiate with one GDS to sell tickets for a $6 fee, and others stay at $12, they'll drop the others. This would make their flights not available to those using those other systems, unless they pay to subscribe to multiple GDS's - quite expensive.

In reality, once one moves, they would all have to move, which is why they are fighting it.

Not necessarily because it depends on how much money you are making from the agents/agencies that subscribe to that system. Sabre charges more of the higher fees for their system but airlines are careful about pulling out because Sabre has the market share in the US

Why? You can't register? Many news sites require registration. I tried to include a link. But could not find the article posted anywhere else. Ever hear of copyright laws? There is a reason you have to register ans pay for some news articles.

But few people will want to register with another site just to help you better understand an article if you don't give them any idea what the article is about.

Not too hard just to post a few sentences from the article and then let us decide whether or not we care enough to register.

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If the airlines can negotiate with one GDS to sell tickets for a $6 fee, and others stay at $12, they'll drop the others. This would make their flights not available to those using those other systems, unless they pay to subscribe to multiple GDS's - quite expensive.


Not to mention all the GDS systems use different formats so it's not as easy as it might seem, this is not a 'windows gui' world by any stretch of the imagination...

I selected the more important parts of the article:

Continental has joined American in warning agents it might not participate in every GDS and revealed to Travel Weekly that it, too, might consider a fee for agents who use a higher-cost distribution channel.

Continental is negotiating with GDSs to try to reduce fees to about $6 per domestic booking, and if an agency is using a GDS that costs $12 per booking instead of $6, “we’re going to seek to recoup that difference,” he said.

Asked whether agents may feel they are caught in the middle of a dispute between airlines and GDSs -- including the crossfire over the new Sabre-Amadeus shared-content deal -- Slater said that’s a legitimate worry.

“Sadly, they are in the middle, no matter how you slice it,” he said. “They have two parties that have a disagreement, and they use those technologies.

“If we reach an agreement with [the GDSs], that’s not a problem,” Slater continued. “But if we don’t reach an agreement with them, they are in the middle.” In a March 28 letter to agents, Continental suggested agents “explore other sources of Continental’s content to plan in advance for possible interruption of availability of Continental’s content on systems that you use.”

Continental’s GDS contracts expire June 30 with Amadeus, July 2 with Sabre, the end of July with Worldspan and in August with Galileo. In addition to demanding a booking fee of about $6 for domestic tickets, Continental also is exploring the option of providing a GDS with only the higher-yield fares the airline believes it can afford to deliver through them; 65% of Continental’s domestic revenue is booked in low-yield buckets, Slater said.

Slater said some talks are going better than others and he expects Continental to reach a deal with at least one GDS soon.

Sabre and Amadeus have attempted to shift the balance of power in GDS negotiations with a deal to share an airline’s fares, schedules and inventory availability if an airline pulls out of one of the GDSs but stays in the other.

Almost immediately, American challenged the Sabre-Amadeus deal, arguing its contract with each GDS prohibits it. Continental also is threatening to take the GDSs to court if they try to implement it.Travel attorney Mark Pestronk says that there is nothing in the ARC agreement or in the individual carrier addendums to the ARC pact that prohibits agents from going to a second GDS vendor to get what they cannot get from their primary vendor. However, he added, airlines could instruct agents on how and where they are allowed to book airlines.

As for what would happen to agents if American pulled out of one of those GDSs and agents used that GDS to access American’s content, American spokesman Ryan Mikolasik said, “The intent is to keep agents from getting caught [in the middle]. American would take issue with the distributor and not necessarily with the agents.”

Separately, American has warned agencies and corporations that it might not participate in all res systems in the future and might institute a “cost-recovery program” if agencies accessed flights through costly distribution channels.Mikolasik said the carrier’s introduction of a cost-recovery program and the economics of it would hinge on the outcome of negotiations with the four systems.