Sabre chief highlights distribution complexity as he talks around AA incentive


In the wake of the latest challenge to the GDS status quo, Sabre chief Sean Menke says the GDS will remain “the most efficient way to move us forward.”

Menke made the statement in his keynote address at the Sabre Travel Technology Exchange, the GDS company’s user conference.

He declared that “change is good” but did not directly address American’s version of change: its plan to pay agents an incentive to book through NDC channels.

He points out that distribution of travel is far more complex than distribution of, say, consumer products.

“This is not Amazon.

“I don’t walk over to a shelf and pick up a product and put it in a box.”

Later, in a meeting with reporters, Menke said the conversations Sabre is having with airlines is all about next-generation, what that might look like and how best to enable it.

“Specifically, with American, there’s always been an historical pushing back and forth.”

American’s plan – to pay agents $2 for each AA-marketed segment booked through an NDC channel – has been widely viewed as a “carrot” to encourage NDC adoption in contrast to Lufthansa’s and IAG’s “stick.”

Lufthansa is imposing a surcharge of €16 on all bookings processed through a GDSBritish Airways and Iberia, the IAG carriers, will implement a less-onerous £8 fee.

Travel industry analyst Henry Harteveldt says there is a lot to like about American’s approach, “not only the business terms, but its flexibility.”

American will pay the incentive regardless of whose connection is used – American’s, a third party’s or even a GDS’s – so long as it has Level 3 certification from IATA.

And it’s not so much about GDSs, Harteveldt adds, as it is “about American finding a way to provide access to better functionality.”

Will $2 be enough to move the NDC needle?

Menke notes that a lot depends on the extent to which the booking method affects the agency workflow. Agents, and ultimately consumers, will determine whether the plan is worthwhile, he says.

Harteveldt says American can adjust the incentive as needed. He adds:

“This is a long-term game.”



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