Biz travel seeks clarity on distribution

9th Aug 2006

Members of the
Travel Management Alliance (TMA) are appealing to the travel industry
to reach accord on travel distribution agreements and costs, and to
take into consideration the needs of the corporate travel community,
the source of nearly 20 percent of all travel in North America.Specifically, the organization, comprising independently owned travel
management companies in the United States that specialize in corporate
travel, balked at the prospect of facing $3.50-per-segment fees
charged by the airlines if major North American carriers do not reach
full content and service fee protection agreements with the industry’s
leading Global Distribution Systems (GDS).
  “Corporate travel organizations simply cannot absorb at $3.50
hit,” said Christopher Dane, TMA executive director. “TMA members use
a variety of GDSs, and we fully support the concept of full content
and protection from airline services fees as critical to our business
success. If carriers can’t reach agreement with the prevailing GDSs,
frankly it will be easier to change air carriers than the GDS.”
  Dane cites as an example the current negotiations ongoing between
American Airlines and Sabre Travel Network, the world’s largest global
distribution system. “The fact that American Airlines can’t reach an
accord with Sabre, for example, puts more than 25,000 travel agency
locations at risk for dramatic cost increases—increases that
corporations and business travelers can ill afford to bear. At TMA, we
wholeheartedly support the full content being stressed by Sabre with
regards to having the American product displayed in their system.
  “We know that both American and Sabre have been strong supporters
of the Travel Management distribution channel and our efforts to
provide a full range of services to our mutual clients. Our belief is
that it is in everyone’s interest to have this matter settled as
quickly as possible to the satisfaction of all concerned. It is vital
not to interrupt the ability of TMCs to provide accurate and complete
information to the thousands of business travelers we work with each
  Dane stated that travel management companies, comprising more than
25% of total travel agencies in North America, resent being caught in
the middle of supplier and distributor negotiations. “It’s hard for us
to understand why some carriers seem blind to the concerns of the very
consumers who often travel with the most frequency and pay the most
lucrative fares,” he said. “Our organization alone represents total
ticketing sales of $2.5 billion annually. Corporate travel is nothing
for suppliers to take lightly.”
  TMA members are expressing concern that industry turbulence
created by failure of suppliers and distributors to reach consistent
and predictable agreements have hurt the TMCs’ ability to pass along
the benefits of the most competitive pricing and attentive, personal
services for travel related programs and technology to their corporate
customers. “Why, for example, has Sabre been successful in negotiating
full content and protection agreements with six major North American
airlines, and can’t seem to close the American deal? It would seem
that a carrier as established as American would understand how
devastating travel content fragmentation is to TMCs, corporations and
business travelers alike.”
  Dane pledged the support of TMA members to continue to work with
both parties to help resolve outstanding differences and ensure the
successful adoption of a mutually satisfactory contract.


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