Amadeus Enters Travel Spat, Reviewing Airline Pacts
07 Janeiro 2011 - 7:08PM
Dow Jones News
Amadeus IT Holding SA (AMS.MC) on Friday joined the barrage of
criticism from travel intermediaries aimed at industry changes
spearheaded by American Airlines, and said it was "actively
reviewing" its contracts with U.S. carriers.
The Madrid-based company runs one of the largest global
distribution systems, or GDS, linking travel agents and online
ticket sellers to airlines. Its stance follows criticism of the
airline from rivals Travelport and Sabre Travel, part of an
escalating battle between the two sectors.
"We are actively reviewing our U.S. airline content agreements,"
said an Amadeus official in a statement.
"Should any development occur that breaches these agreements,
Amadeus will take the actions we feel appropriate and in the best
interest of our customers and our business."
Amadeus didn't comment directly on the spat that has seen
American's fares and schedules dropped by Sabre and Expedia Inc.
(EXPE), the largest U.S. online travel agent, after the airline
pulled its inventory from Orbitz Worldwide Inc. (OWW).
However, Amadeus criticized the efforts to change ticket
distribution that is being led by American, a unit of AMR Corp.
(AMR).
American executives have said they are committed to requiring
all external sellers to access its fares and schedules through an
electronic link--or direct-connect--rather than through the GDS
operators that still dominate the airline ticket market, especially
for corporate travel.
The third-largest U.S. airline said the system allows it to be
more responsive to traveler needs, but wants to remain partners
with GDS providers and is in contract renewal talks with the main
providers. The direct connect system would also allow the carrier
to cut costs and allow it to boost revenue from selling "unbundled"
products such as assigned seating.
Amadeus and rivals charge airlines for the ticket sales they
facilitate, often passing on part of the charge as a commission to
travel agents.
"The 'direct connect' model only promotes fragmentation, raises
costs, and creates inefficiencies across the travel industry
distribution chain," said Amadeus in a statement issued to travel
agent customers late Thursday. "And for travelers, a direct connect
approach will result in higher fares, fewer options, and the
elimination of true transparency in their air travel."
The GDS providers' contracts with most U.S. carriers expire over
the next 18 months.
"In terms of airline content, Amadeus has content agreements in
place with carriers worldwide (including major U.S. airlines) and
plans to continue to do so in the future," the company said.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
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