Expedia delivers another (potential) blow to Worldspan
Expedia delivers another (potential) blow to Worldspan Worldspan told the Securities and Exchange Commission that Expedia has yet another deal with another GDS. "In October2005, Expedia notified us of its intention to move some portion but not all of its European transactions to another GDS provider in 2006," Worldspan said.
"At present, Expedia's European bookings represent approximately 3% of our total transaction volume for the six month period ended June 30, 2005," Worldspan's SEC filing stated. "If Expedia were to move a material portion of its transactions to other GDS providers, our business would be negatively and materially impacted."
Expedia signed a deal to move some bookings to Sabre a year and a half ago, but for reasons that are unclear, the shift has not yet begun.
AirTran leaves Worldspan, inks deal with Galileo
AirTran Airways will end its participation in Worldspan effective Nov. 10. The carrier said it could not come to terms with Worldspan on the cost of participation.
AirTran did, however, reach an agreement with Cendant Travel Distribution Services to distribute its fares, schedules and inventory through Cendant's Galileo/Apollo systems. It reached an agreement to distribute through Sabre and Travelocity last month.
AirTran's decision to part company with Worldspan will make it unavailable for booking on third-party Web sites powered by Worldspan, which include Expedia, Orbitz, Priceline and Hotwire. Curiously, in its public statement AirTran mentioned only the break with Expedia.
"We have mutually agreed with Expedia that as a result of the termination of our Worldspan agreement, and the limited ability to jointly serve our customers going forward, it is best to discontinue the sale of AirTran Airways flights at Expedia.com at this time. We have had a productive partnership with Expedia and hope that someday we may be able to renew it," Kevin Healy, AirTran Airways vice president of planning, said in the statement.
But Expedia took issue with that interpretation of events. "AirTran's statement that they turned us off is patently inaccurate," it said. "In fact, Expedia.com removed AirTran from its site" on Oct. 27. "Recent business decisions by AirTran left our ability to provide great customer service in jeopardy. So we were left with no other option but to turn off the service so as to continue to provide a positive end-to-end customer experience on Expedia.com."
AirTran's moves gave rise to speculation on several fronts. It is not among the seven carriers that have announced direct connections with Orbitz. When Orbitz announced the addition of United to its Supplier Direct program a year ago, it said it was working on a connection with an eighth airline but did not disclose its identity.
Orbitz and Worldspan sued each other for fraud in September. Orbitz claimed Worldspan enticed it into signing a long-term agreement, then sprang dubious charges of wrongdoing and presented Orbitz with a $40 million bill. Worldspan claimed Orbitz stole its data to facilitate bookings through its direct connections with airlines. It is not a stretch to assume that Cendant would like Orbitz to get out of its Worldspan contract, which extends into 2011, and use its own Galileo system for bookings on airlines that do not participate in Supplier Direct. If that were achieved, AirTran would be distributed through Orbitz.
Worldspan has a large subscriber base in Atlanta, where both it and AirTran are based. But Worldspan agencies can book the carrier on its agency Web site and earn a 5% commission.
In addition, AirTran has direct connections with AgentWare's Travel Console and Outtask's Cliqbook. Worldspan told subscribers that PNRs already booked on AirTran will remain serviceable, but it reminded agents that other airlines "offer attractive alternatives and provide competitive fares on all routes serviced by AirTran."
Worldspan did have some good news to report with its renewal as a preferred GDS provider for Travelsavers, a consortium of 2,850 independently owned travel agencies with annual sales of $18 billion.