New Wholesale Model Could Shake Up Airline Distribution Thanks to American Airlines Test With Sabre
Skift Take
We read the 100-page rulings on the proposed merger of Sabre and Farelogix so you don't have to. Airlines want to take over a lot of the tech work from Sabre and its rivals and pay travel agencies directly for bookings. American Airlines says the new model has already saved it millions. But the rulings found few tech vendors up to the task.
When British and American legal authorities published rulings on a merger case this month, they also provided a comprehensive, impartial look at how airlines want to change the way they sell tickets.
The rulings focused on whether technology companies Sabre and Farelogix should merge. But along the way, they summed up dozens of interviews with experts and leaders at airlines, agencies, and tech vendors worldwide. The rulings suggest that the sector — where airlines spend about $9 billion a year — is heading in a new direction.
The rulings found that large airlines have chosen to cooperate with tech middlemen, despite years of fighting. Yet some airlines will push a new "wholesale model" to pay travel agencies. The wholesale model would overthrow today's system, where airlines pay tech intermediaries, who, in turn, kick back some of the commissions as incentive payments to agents.
The rulings reached opposite verdicts. In the U.S., a federal judge sided with Sabre against t
