American extends content agreement with Travelport

American extends content agreement with Travelport

American Airlines and Travelport have temporarily set aside a row over fare distribution whichs threaten to transform the existing global distribution system (GDS) model.

GDS-owner Travelport and American issued a joint statement announcing: “The existing full content agreements between American and Travelport’s global distribution systems Apollo, Galileo and Worldspan have been extended concurrently and are no longer due to expire in 2011. [The] terms of Travelport’s subscriber opt-in programmes for American remain unchanged.”

The pair gave no further details and declined to comment. But it is understood the companies have been negotiating while preparing competing lawsuits alleging anti-competitive behaviour.

The dispute first reached court in the US in Illinois in December after American terminated an agreement with online travel agent Orbitz, which is part-owned by Travelport. At the back of this lay the carrier’s desire to renegotiate the terms of its appearance on GDS displays – a bone of contention for most full-service airlines – as part of which American sought to drive bookings via its own online Direct Connect system.

American’s action led to a wide belief that other carriers would follow suit in attempting to cut GDS distribution costs. Travel management companies (TMCs) have come to accept a change is inevitable, and British Airways head of UK sales Richard Tams said recently: “The GDS model is broken . . . we’re open to ideas on a new model.”

However, fall-out in the UK has been minimal since American withdrew a threat early in the year to issue agency debit memos for charges levied on fares sold through Travelport GDSs. There will be relief at the extension of existing full-content agreements, but TMCs will wait to see the full outcome of negotiations and litigation in the US before passing judgment.

A separate but similar dispute between Sabre and American remains the subject of competing antitrust claims in Texas.

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