On May 4, Air Canada withdrew its Tango fare for travel within Canada and between Canada and Florida from the GDSs and from its own dedicated travel agency Web site, aircanada.com/agents.
In response, Sabre began "de-preferencing" Air Canada's displays in its GDS to ensure that flights by carriers that provide full content are displayed before Air Canada flights. Galileo said it would no longer return Air Canada results in low-fare shopping inquiries unless they are specifically requested.
The moves by both GDSs apply outside of Canada and the E.U. Tango fares, Air Canada's lowest levels, are "stripped down" fares; advance seat selection for Tango purchasers costs an additional C$15, and Aeroplan members earn 50% of the flown miles.
In addition to the "sell up" option for advance seat selection, Air Canada recently introduced a "sell down" option: Purchasers of Tango fares can save another C$10 each way if they agree not to make any changes to their booked itineraries and to fly without checked baggage, within the normal carry-on bag allowance.
In order to obtain the discount, customers must click on the GO Discount Tango fare option when making an online booking.
Passengers also can "mix and match" options on the same fare, paying C$15 for seat selection and saving C$10 for not checking bags.
The Internet environment has taken the airline industry in new directions, Marc Rosenberg, the carrier's vice president of sales and product distribution, said, but traditional GDS technology does not support Air Canada's simplified fare products.
"Unfortunately, they just can't handle it," he said, adding that Air Canada would have no problem making the fares available through the GDSs if they could display the various options.
He said Air Canada competes head-on with low-cost carriers on its home turf. A travel agent looking at fares in a GDS will see only that both Air Canada and an LCC are offering a $100 fare, but the agent won't see Air Canada's "unbundled" options.
"That puts us at a tremendous disadvantage," Rosenberg said. Air Canada began the unbundling of its fares in May 2003, about a month after it entered bankruptcy protection, with the breaking out of advance seat selection.
"As we went through the dark hours as a legacy carrier morphing ourselves into something new, we pushed the envelope and tested the market and appetite for new and different things," Rosenberg said.
Rosenberg said the carrier has had "ongoing discussions" with various vendors about meeting airlines' changing needs. The public has embraced the unbundled fare concept enthusiastically, and "travel agents should be able to sell these fares," Rosenberg said. He said Air Canada removed Tango from its agent site due to contractual obligations to vendors.
In response to inquiries, Sabre said it was disappointed that Air Canada made a "drastic" move that makes it "more costly and more difficult for agencies to sell Air Canada, negatively impacting agencies and consumers. In effect, Air Canada has implemented a significant fare increase through the agency channel."
It said it was "working with Air Canada to resolve this situation and ensure our customers have access to the Tango fares through the Sabre system. We have heard from the travel agencies how unhappy they are about this surprise move by Air Canada and have been told that many of them are contacting Air Canada to reconsider, or are considering moving to different carriers."
Galileo said it is "frustrated and severely disappointed that with virtually no advance notice, Air Canada has taken the severe action of removing Tango fares from all the GDS systems, including the Apollo system, and is no longer permitting the pricing or ticketing of Tango fares. We stand behind our customers and their need to have access to full content in a cost-effective manner."
Galileo said if it is unable to resolve the flap amicably, "we would pursue whatever means we need to protect the interests of our customers, including legal action."
Air Canada said Tango is primarily a domestic product. In the transborder market, it is available year-round only on routes to Florida; in other U.S. markets, Tango fares are offered for limited-time promotions.
Bruce Bishins, president and chief executive officer of CSTAR, a Canadian travel agency association, called Air Canada's handling of the current dispute "deplorable," but he also had plenty of blame to dish out for the GDSs. "There is no way that Air Canada will return its low fare inventory to the high costs and limiting technology which most GDSs continue to embrace," he said. GDS companies' response to new functionality has been "lackluster," he said. Bishins also is president of Genesis, a travel agency-owned and managed distribution system.
Kevin Mitchell, chairman of the Business Travel Coalition in the U.S., said opposition to Air Canada's move "is becoming so strong and diverse that the airline will realize the harm its policy is causing and reverse course."
Mitchell dismissed Air Canada's contention that technology was at the heart of the dispute. "Contrary to Air Canada's spin, there are no technological limitations involved in loading these fares into GDSs; the only technological problems have come from Air Canada deliberately throwing sand in the gears of managed travel programs through this unfortunate and unwise move."
The Association of Canadian Travel Agencies, the Canadian Corporate Travel Association and the American Society of Travel Agents also called on Air Canada to restore Tango fares to the GDSs, saying the fares represent roughly 20% of tickets used by Canadians. "Unbundling" has been slow to catch on in the U.S. A notable exception is Northwest Airlines, which a few months ago began offering exit row and far-forward aisle seats in coach for an additional $15.
The carrier offers the seats when passengers are checking in online at nwa.com. GDSs cannot handle the transaction at this juncture.