On Monday, American Airlines filed suit in a Texas court, winning a temporary injunction to bar Sabre, a global distribution system, from hiding American’s fare data.
American’s move came after Sabre announced on January 5 that it would not renew its contract to distribute the airline’s inventory, and began giving preferential treatment to other airlines in its listings database.
Sabre had been prompted into action by American’s announcement of Direct Connect, a flight information database portal developed by the airline that would circumvent the use of Sabre’s own system.
Sabre Holdings Group currently operates the largest electronic distribution for the travel industry. The original technology was developed by IBM for American Airlines in the 1960s, but American sold the company in 2000.
American still relies on Sabre to distribute its information to more than 57,000 travel agents worldwide. However, in the last decade, fare listing costs have steadily increased. This has prompted American and other airlines to re-evaluate their reliance upon distribution conglomerates such as Sabre and Travelport.
Sabre-owned Travelocity has not taken steps to alter American’s flights from its Web site. This is in contrast to Expedia, which began hiding American flights in late December.
But in the dispute over the future of online travel, the elephant room is Google, whose pending acquisition of ITA Software could alter the playing field.
Google currently allows users to enter flight queries, such as “LAX to NYC 1/11-1/3,” into its search engine. However, the resulting link redirects to a site like Expedia.
With flight data from ITA, Google could effectively undercut sites like Orbitz and Travelocity by listing flight information directly in their search results.
Additionally, online travel Web sites make a good portion of their revenue selling hotels and car rentals along with airfare. Google could capture some of these related sales by displaying ads from companies that would pay to have their properties and rentals displayed next to the results on frequently searched routes.
Google’s actions are likely what emboldened American Airlines to strike first, in December, removing their fares from Orbitz, an online travel agency owned Travelport.
By developing their own Direct Connect service, American is looking ahead towards a future where aggregators and search engines replace online travel agents and flights are booked directly on an airline’s homepage.
There is certainly a precedent. Dallas-based Southwest Airlines, the largest airline in the United States by passenger volume, does not list its fares on any site other than Southwest.com.
By Fernando Padilla for PeterGreenberg.com.
Related links on PeterGreenberg.com:
- Sabre Dumps American Airlines As Online Booking Wars Heat Up
- FairSearch Adds Members In Opposition To Google’s Acquisition of ITA Software
- Expedia Protests American Airlines Decision By Hiding Its Fares
- US Airlines Bullish For 2011: More Fees For Travelers
- Delta, American Airlines Pull Fares From Some Third-Party Web Sites
- American Airlines Leads America’s Airlines In Domestic Airfare Increase