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ARTA Joins AA/Sabre Battle: It’s All About Segment Fees

January 6, 2011 By: George Dooley

The Association of Retail Travel Agents (ARTA) and the Association of Retail Travel Agents - Canada (ARTA Canada) raised serious warning flags that Sabre's intention to remove American Airlines content as of August 2011 could lead to more retaliation from both sides of this escalating dispute. As a result, travel agents could be left in the crosshairs and "up the creek without a paddle," according to the associations.

"The sniping and rhetoric emanating from this very public and troubling disagreement has to stop; now. ARTA fully supports the Open AXIS Group's call for industry dialogue on these issues. Until we have open and transparent discourse on the underlying dispute, travel agents will continue to face an uncertain future as to distribution tools and all-important content access," said Sally Watkins, Vice chairman of ARTA.

ARTA said Sabre's interim plans to immediately disfavor AA inventory in GDS listings and to increase segment fees charged to AA will very likely result in surcharges passed on to agencies by AA in much the same way as in the ongoing similar dispute with GDS-owner Travelport.

“By bringing U.S. agents into the fray, the dynamics and levels of tolerance among agents, GDSs, and AA (and likely other airlines) will disintegrate even more rapidly,” said Bruce Bishins, president and CEO of ARTA Canada. “As a consequence of Sabre's plan to eventually remove AA entirely, Sabre may be inflicting itself with significant contract issues and a steady exodus of users. Travel agency subscribers of Sabre may find valid content reasons to terminate their relationship with Sabre early if AA is not available in key agency markets. Certainly Sabre subscribers in the Chicago, Dallas, and Miami areas, for example, may find it unbearable to have a GDS without a key market participant like AA.

"It does seem quite disingenuous for GDSs to use the 'what's good for the travel agent and consumer argument' when some of these very GDSs have for years maintained restrictive covenants in their agent/GDS contracts preventing the use of agency tools which blended GDS airline inventory with non-GDS airline inventory - all in a monopolistic attempt by the GDSs to prevent comparative displays and non-GDS bookings - no matter how good the schedule or fare may have been for the consumer. Let's be honest, this is all about GDSs protecting their segment fee earnings and keeping those fees as high as possible."

Bishins said the "cat and mouse" game being played by the GDSs will “ultimately fail and that airlines will prevail in doing everything possible to not only protect their distribution cost reduction and content enhancements now, but create the next generation of distribution platforms for the long term.”

Bishins was the earliest proponent of a cost-neutral, unbiased travel distribution system, as early as 1995. ARTA notes the current acrimony between GDSs and airlines will likely bring “greater urgency and attention to the development by content and technology providers of such a platform; the GDSs have much to lose if they continue down their retaliatory path. Travel agents will go wherever the content resides; they have no choice but to do so.”

ARTA is headquartered in Scottsdale, Ariz., and is the strategic partner of Canadian-based ARTA Canada.



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By George Dooley | January 6, 2011
ARTA takes a critical look at dispute between AA and Sabre seeing a potential disaster in the making.
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