Sabre aligns with rivals in opposition to American's strategy

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Sabre has opted to disfavour American Airlines' fare offerings in its global distribution system (GDS) listings and eliminate booking fee discounts, in the latest indication that GDSs and online travel agents are aligning in opposition to the Oneworld alliance member's attempt to impose a new travel distribution strategy.

American has been pushing a model that would see travel agencies bypass GDSs like those operated by Travelport and Sabre and connect directly with the carrier's reservation data, a move that would result in the loss to the agencies of segment fee rebates from GDSs.

After failing to reach an arrangement with Orbitz, whereby the online travel agency - which is 48% owned by Travelport - would increase the amount of tickets processed through its direct connection with American, the carrier removed its inventory from Orbitz at the end of last year.

Rival online travel agent Expedia quickly followed suit, a move that "reflects a fear that American's move could alter the balance of power between agents and the airline", notes the Royal Bank of Scotland in a 5 January research note.

In an apparent show of solidarity, Sabre in a statement yesterday said it is "taking actions to protect its interests and those of its customers by supporting airlines who value the transparency and efficiency of the proven system we provide". The company, which owns online travel agency Travelocity, reportedly intends to drop American from its system in August, one month before their contract expires.

American hit back at Sabre, saying the firm "has taken a set of punitive actions against the airline and its customers, despite the fact that American has met all its obligations and continues to work in good faith". It says the actions "are anti-consumer, anti-competitive and harmful to its subscribing agents".

This latest development, says the Business Travel Coalition, puts to rest that this battle is not a skirmish between American and online travel agencies "but rather an all out war for the future of both airline and all travel distribution in the US and around the world".

Indeed, the Royal Bank of Scotland notes that Amadeus shares fell 5% yesterday in contrast to strong overall markets. "This is of relevance to the valuation of the European network majors since the Amadeus holdings account, on our estimates for 25% of Iberia's asset value, 21% of Air France-KLM's asset value and 4% of Lufthansa. This development follows the spat in the US, where American is in a standoff with travel agencies over GDS fees."