United Takes Steps to Lower Its Distribution Costs

United Airlines announced today that it has taken another step toward
lowering its distribution costs as part of the company’s ongoing
restructuring efforts. Starting today, United will use Orbitz’ Supplier
Link Technology that will enable Orbitz to book tickets directly with
United’s reservation system instead of through a global distribution
system (GDS). By bypassing a GDS, United can eliminate the fee it
typically pays for tickets issued through a GDS, making Orbitz one of
United’s lowest-cost distribution channels. “Using Orbitz’ Supplier Link Technology is just one of the strategic
initiatives United has underway to help us reduce our sales and
distribution costs,” said John Tague, United’s executive vice president -
Marketing, Sales and Revenue. “We are extremely committed and serious
about shifting our distribution to the lowest-cost channels in order to
stay competitive for our customers.”

Tague said that United is implementing and reviewing other initiatives
that will help United reduce its sales and distribution costs as part of
the company’s overall, ongoing restructuring efforts. These initiatives
include:

—analysis of next-generation technologies that will bring long overdue
competition to the travel distribution marketplace;—improvements to
existing low-cost distribution channels;—the creation of new
distribution channels that deliver value to the customer;—and the
renegotiation of existing distributor and supplier contracts.
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