Skift Take
As Sabre fights to acquire Farelogix, it's important to examine exactly why intermediaries are beginning to scoop up the companies built to disintermediate them.
Big-time drama in corporate travel!
This week we have a missive from Senior Travel Tech Editor Sean O’Neill, who headed down to scenic Delaware to enjoy the closing arguments in the U.S. Department of Justice’s lawsuit aimed at Sabre’s pending merger with Farelogix.
The DOJ argued that the move would reduce competition in the space, since GDS bypass services from Farelogix pose a competitive threat to traditional global distribution systems.
Sabre’s lawyers proposed, instead, that the services offered by Farelogix would become just another product like anything else the distribution giant offers. They are a shelf in a store offering products, not a store themselves competing against mom-and-pop Farelogix next door.
Anyone who follows the industry knows that disintermediation remains a major threat to the future prospects of not just Sabre but Amadeus and Travelport. I recall a source who once asked me, “Honestly, what is Sabre but 300 different direct connects?” Makes you think 🤔.
Check out Sean’s story for more on the trial and how the DOJ moved to humiliate Sabre in court.
We’ve also got the latest on the cancellation of Mobile World Congress and the upcoming closure of Air Italy.
If you have any feedback about the newsletter or news tips, feel free to reach out via email at [email protected] or tweet @sheivach.
— Andrew Sheivachman, Senior Enterprise Editor
Featured Stories
Sabre and Farelogix Leave Merger in Judge’s Hands as the Justice Department Rests Case: A federal judge heard closing arguments in the U.S. government’s antitrust suit to block Sabre’s acquisition of Farelogix. Inside the courtroom, Judge Leonard Stark’s comments didn’t show his hand. The case seems a close call.
Singapore Slashes Visitor Arrival Estimates by a Third for 2020 as Coronavirus Tests Its Mettle: The growing number of coronavirus cases in Singapore has heightened worries about human-to-human transmission among travelers, but the government’s swift and clear response so far shows its ability to manage a crisis.
Mondee Buys Airfare Wholesaler in Play for Ethnic Travel Agencies: Mondee’s acquisition of fast-growing CTS (Cosmopolitan Travel Service) makes the group North America’s largest airfare wholesaler by market size. Notably, Mondee could afford the deal thanks to fresh backing by TCW Group, a giant asset management firm. Lots of institutional money is seeking opportunities in travel this year.
Qatar Airways-Backed Air Italy Is Shutting Down: Another European airline bows out. Alitalia has once again outlasted one of its purported challengers — now it desperately needs to find a buyer.
New Starbucks Airport Partnership Aims for More Coffee, Fewer Lines: After HMSHost severed its exclusivity agreement to operate Starbucks airport locations, OTG hospitality group quickly stepped in to fill the void. OTG is well-known for its use of tech to make the airport dining experience more efficient. Let’s hope it finds a way to eliminate those long Starbucks lines.
The Future of Travel
Mobile World Congress Cancellation Over Coronavirus Is Foreboding Sign for Events: The cancellation of a major event outside of China is a serious warning for meeting planners to take action to preempt concerns over the coronavirus.
JetBlue Founder Finally Offers Details About His New Airline — Including Its Name: David Neeleman’s new airline promises to have good service at competitive prices. That’s his strategy at every airline, and it’s commendable. But Neeleman is also planning to operate what is essentially two business models at once. Can he pull it off?
Hilton CEO Says Business Could Be Impacted for Up to a Year From Coronavirus: Hilton and many other major hotel companies have had to close hundreds of hotels in China in response to the coronavirus. The outbreak could have long-lasting effects on the hotel industry, which has already been grappling with a slowing global economy and other geopolitical issues.
Senior Enterprise Editor Andrew Sheivachman [[email protected]] curates the Skift Corporate Travel Innovation Report. Skift emails the newsletter every Thursday.
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Tags: corporate travel, ctir, farelogix, sabre