Airlines have learned that standing up to the global distribution system giants can actually yield benefits. It has been a hard-earned victory.
Sabre informed its travel agency and corporate customers that it signed a new distribution agreement with British Airways and Iberia Airlines, and it encouraged these customers to negotiate directly with the airlines for better content and pricing than Sabre, Amadeus, and Travelport will provide through their distribution systems, Skift has learned.
Skift obtained an internal email from Sabre to its customers informing them that agencies and corporate customers that get British Airways and Iberia fares and flights through Sabre will be subject to a surcharge even though the quality of that content would likely be inferior to the inventory that travel management companies would receive when concluding agreements directly with the airlines’ parent, IAG.
Negotiations came to a head between Sabre and IAG, which owns British Airway and Iberia, and Sabre is passing the buck onto its travel agency clients.
“Sabre has signed a new distribution agreement with BA and IB,” states the email. “In this new model, BA/IB and the agency negotiate the content commitments. Agencies entering into a Private Channel agreement will have access to presumably better BA/IB content than if they did not enter into such agreement.
“We recognize that some agencies will not sign a Private Channel agreement. Agencies that do not sign a Private Channel agreement can continue to book BA/IB content in Sabre. These agencies may have access to less content and be subject to the BA/IB surcharge, however the content for these agencies that is available through Sabre will be no less than the content available through other GDS.”
Both Sabre and British Airways confirmed the agreement.
Skift took an extended look at the challenges facing global distribution system providers earlier this year.
When International Consolidated Airlines Group (IAG) announced it would levy a surcharge on flights booked through global distribution systems earlier this year, observers noted it was only a matter of time until the distribution giants tried to renegotiate.
The surcharge, which went into effect on November 1, followed in the footsteps of Lufthansa Group, which has successfully moved share to more profitable channels with this controversial strategy.
This has serious ramifications for agents using Sabre systems.
Larger agencies with the most booking volume will likely have the strongest negotiating position in discussions with British Airways and Iberia Airlines, while smaller agencies won’t be able to negotiate better terms. This will lead them to book clients on different airlines or book outside of the global distribution system channel.
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Photo credit: Sabre is leaving it to agency partners to negotiate directly with the airline. Pictured is an image depicting Sabre from a hackathon in Las Vegas in June 2017. Sabre