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Sabre Makes a Play for Web Fares

Moving to capture more of the so-called "Web fare" ticket market, travel giant Sabre Holdings is offering enticements to carriers that sign a multi-year deal covering distribution of all airline content through Sabre's Global Distribution System (GDS).

US Airways , restructuring under bankruptcy protection, is the first carrier to sign up.

Southlake, Texas-based Sabre , which also operates Travelocity.com, said that its new direct Connect Availability (DCA) Three-Year Option guarantees Sabre Holdings access to all published fares, promotions and services of a participating airline, and commits the carrier to a three-year term "at the highest level of participation in the GDS," in exchange for an established booking fee rate.

"All content will be made available through all Sabre connected channels, both online and off-line," the company said.

US Airways said that consumers can now buy Web fares - the heavily discounted tickets that some airlines sell on their own sites as well as on consortium site Orbitz - from any travel agency using the Sabre automation system.

Travelocity in the past has complained that Orbitz's airline owners have withheld some Web fares, and the new offering from Sabre appears to be aimed at making sure the company gets a slice of that pie through its GDS.

And just in time, perhaps. A new study by Forrester Research predicts that this year, travelers who book air fares online will spend just under 30 percent of their leisure travel budgets online, driving $22.6 billion in revenue. By 2007, 32 percent more households will spend 39 percent of their travel budgets online, generating $49.7 billion in revenue.

"Without the Internet, the travel industry's financial performance would be even worse than we're now seeing," said Henry H. Harteveldt, senior analyst at Forrester. "More than six in 10 US households research their leisure travel online today because they know that's where they'll find the best deals."

Orbitz itself has taken steps to provide travel agents with direct access to its Web-based search engine and its inventory of low-fare ticket prices.

"We applaud US Airways' move to reduce fare confusion in the marketplace, and we are extending that same opportunity to other airlines," said Eric Speck, chief marketing officer at Sabre. Current airline agreements with Sabre typically cover only 30-day terms.

Through the DCA Three-Year Option, a participating airline agrees to provide all published fares with the exception of opaque fares (those where the supplier's identity is not disclosed until after the sale).

What do the airlines get? Sabre said each participant will receive a reduction to its booking fee for DCA of approximately 10 percent, which represents an average of 40 cents per booking. And, the airline also receives the interactive display of its complete inventory down to the last seat available -- in real time.

Sabre also gets an equal opportunity for its users, off-line and online, to participate in special promotions, such as frequent flyer bonus mileage programs.

US Airways is the nation's sixth-largest carrier. It filed for Chapter 11 bankruptcy protection in August.

Meanwhile, Travelocity is launching a new merchant program for hotels aimed at letting its hotel partners choose how they provide rates and inventory to Travelocity: either seamlessly through the hotel partner's central reservation system or through Travelocity's Web-based Extranet.

By the end of 2002, Travelocity said it expects to have more than 2,000 hotels enlisted as merchant partners, complementing its existing partnership with Hotels.com.