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As American Airlines clashes with Sabre, travel agents suffer

January 13, 2011|By Andrea Ahles

Reporting from Fort Worth, Texas — A fight between the big boys is now hurting the little guys.

With Sabre Holdings announcing last week that it would drop American Airlines' fares from its system in August and in the meantime make those fares harder to find, some travel agents say their agencies are paying the price.

"I can't have an agent spending all day long checking airline websites for an airfare," said Debbie Stevenson, owner of Ridgmar Travel in Fort Worth. "I feel totally helpless. I'm at the mercy of two large companies, American and Sabre."

At issue are the fees that American and other airlines pay to the big travel reservation systems — called global distribution systems, or GDS — to display flights and make ticket bookings. American wants travel agencies and websites to connect directly to American's own system instead of using a GDS like Sabre.

The dispute started last month when the Fort Worth-based carrier pulled its fares off Orbitz, one of the largest travel websites. Expedia, another big travel site, then decided to drop American's flight information. Southlake, Texas-based Sabre intends to do the same when its contract with American expires in August.

American, a unit of AMR Corp., on Monday sued to prevent Sabre from raising booking fees and hiding American Airlines fares.

The escalating fight may push some travel agents out of the airline-ticketing business altogether, particularly since American and other airlines eliminated travel agency commissions on tickets in 2002.

"We don't make money on airline tickets, but they are a courtesy for our clients," said Dezi Whiteaker, general manager of All Ports Travel in Arlington, Texas. "That is the only reason we continue selling it."

If American and Sabre can't reach an agreement before August and Sabre does drop American's fares from its system, Stevenson said her agency will sell strictly cruises and tour packages.

It has already become difficult to find American fares in the Sabre system after Sabre's recent actions, she said. For example, on Thursday, when Stevenson searched for a flight from Dallas/Fort Worth Airport to Austin, the first option Sabre listed was a British Airways flight. (The flight was actually operated by American but is listed as part of a code-sharing pact the two carriers have, in which they sell each other's flights.) Similarly, a search for a Dallas-Baltimore fare showcased a Qantas flight, also a code share with American.

Industry analyst Henry Harteveldt of Forrester Research said the current distribution model, in which the airlines pay fees to the GDS companies and the GDS companies share the revenue with travel agents, is not sustainable.

"What is really needed is a new model where the airlines pay less for distribution and the travel agencies pay more, but are compensated in another way, recognizing their benefit," Harteveldt said.

Steve Cosgrove, president of Dynamic Travel in Southlake, said he supports Sabre's move to block American's efforts to push travel agents to use its Direct Connect service. Cosgrove said he's concerned that although American's Direct Connect currently is free for travel agents to use, the airline will eventually make them pay to use it.

"The airlines don't pay us to sell their product, and now they want us to pay them to sell their product," Cosgrove said. "It's going to be a nightmare."

At the same time, Jim Gray, president of Dallas-based Jim's Travel Link, is unhappy with Sabre's actions.

Gray said he signed a new, five-year contract with Sabre six months ago and asked Sabre executives whether the company would continue its long-term relationship with American. Gray's agency primarily handles corporate travel and books a significant number of tickets on American, which has 85% of the flights at Dallas-Fort Worth Airport.

If Sabre does not carry American's flight information, the Sabre system is worthless to him, he said.

"I'm not here to be a pawn between Sabre and American Airlines," Gray said. "That's why I'm not happy. I can't plan for my travel agency's future because of all the secrecy and bullying."

Ahles writes for the Fort Worth Star-Telegram/McClatchy.

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