GDS contracts

Posted on 18 July 2006 by Norm Rose

I thought I’d chime in on the current industry focus regarding total access fees and the renegotiation of GDS contracts. I tend to look at this issue in a very black and white fashion:

  • Financial incentives for travel agents (and TMCs) are going away. Whether this is the first step (e.g. Sabre, Galileo) or a complete elimination (Worldspan) of these payments, it is just a matter of time until these funds disappear
  • No travel agent or TMC can depend on total content from a GDS no matter what happens with the remaining hold outs (e.g. AA and Sabre, DL and Worldspan)
  • Larger TMCs have already implemented technology (e.g. CWT’s Symphonie, Amex’s TravelBahn) to aggregate content. Second tier TMCs and below need to lean on their consortium to find a solution to this aggregation problem
  • The Air Canada Tango issue is only the tip of the iceberg of the coming changes in how airline inventory is distributed. With all due respect to BTC, I am not hopeful that a negotiated solution to this issue will be reached.

At the end of the day the bottom line is that the airlines are continuing to bleed and the intermediaries and in some cases corporate customers will ultimately have to pay the price.

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