Sabre Says New Delta Contract Rewarding Extras Like More Legroom Is Model for Future
Skift Take
Sabre and its peers are finally accepting airline demands that distribution contracts should have incentives to build technology that boosts the upselling of travelers. The industry frames the move as providing value to flyers because it makes bundled services easier to buy.
Airline distribution is the largest business segment for Sabre, so new airline contract terms are a big deal for the travel technology company based in Southlake, Texas.
Sabre said Tuesday that a multi-year distribution contract with Delta Air Lines that it announced on Monday has terms Sabre believes will be a model for its contracts with other large carriers.
The Delta contract more explicitly links Sabre's commission to the upselling of ancillaries, such as checked bags and more legroom.
"If we're helping them sell higher yield tickets, we will actually get more revenue for that," said Sean Menke, president and CEO.
The shift is an evolution. It moves toward aligning Sabre's take to be more proportional to a traveler's total transaction price. The formula has been re-weighted to reward Sabre whenever Delta sells higher-priced transactions that often include ancillaries, rather than by transaction or period.
"I would also say the same thing as it relates to the Lufthansa agreement: that there are incentives associated with technology advancement that allow them to get to higher yield traffic," Menke said, referring to a contract it signed with Lufthansa Group in December. "So again, this is very much in line with what we want to do because it aligns the parties."
Delta also said on Monday it had agreed to help support Sabre in the development of an airline storefront — which provides digital "shelves" that more p
