It all started with an announcement in May. Delta Air Lines and Sabre signed a deal whereby rather than paying a “commoditized” flat fee to the global distribution system operator per sold transaction segment, the fee would be based on the value of the offer. Delta called the arrangement an “industry-first model.” Travelport followed in August, and Delta hit the GDS trifecta when Amadeus signed a similar agreement in November.
“This entire initiative was built around the idea that we have to provide a more modern experience to our corporate travelers,” Delta managing director of global distribution and omnichannel strategy Jeff Lobl told BTN. “They are the reason we did this. … We’ve come a long way in developing a more expansive product line and are going a lot further in bringing ancillaries and other options into the shopping path. If we don’t find a way to unlock and bring additional products to customers, then the investments the industry has made will fall short of potential. We are seeking to provide an incentive for innovation.”
Lobl added that Delta has six core products, and the “old commercial model” did not differentiate between them. “Value-based [pricing] addresses all of that,” he said.
Lobl said that “no matter how much choice a travel manager wants to provide, it’s currently in an ecosystem that makes it difficult to accomplish. Today, largely a single lowest fare is made available, and our objective is to open up more choices to be exercised at the discretion of the travel manager.”
Delta spent a lot of time during the height of the Covid-19 pandemic working out the details on making value-based offers work for all parties involved, Lobl said. The company worked with all three GDSs in a “relatively tight period of time.”
Sabre is displaying the Delta offerings through its New Airline Storefront, which Delta helped to develop and which has been rolled out as the default in the Sabre Red 360 agent desktop. Flight search results are arranged in columns of “shelves” of comparable but competing airline offers, which “give[s] Delta a brand-consistent experience with their products in the indirect channel that matches their direct channel,” said Sabre Travel Solutions chief product officer Wade Jones in May.
That display is what potentially could cause trouble for at least the Sabre deal. American Airlines sued Sabre in Texas in June, claiming that the New Airline Storefront breaches its contract with American and biases results toward Delta. American asked for a temporary restraining order and injunction on the rollout of the New Airline Storefront, but in late October, a Tarrant County, Texas, judge denied the request after a hearing the previous week. The case will continue toward trial.