Sabre Holdings Corp. said US Airways signed a renewal of its Direct Connect Availability Three-Year Option agreement, extending the pact one year beyond October.
US Airways was the first carrier to sign a DCA-3 agreement and to join Galileo Internationals version of the program, Preferred Fares.
In Sabres second-quarter earnings briefing with investment analysts, chairman Sam Gilliland said the extension of the agreement incorporates roughly similar terms and conditions as the original.
He said Sabre hopes to provide that same value to the merged entity of US Airways and America West. DCA-3 requires participating airlines to provide access to all their published fares, including Web fares, in exchange for lower segment fees. It was introduced in the fall of 2002 but did not begin to pick up steam until the following summer, so most contracts will not come up for renewal until next year. Gilliland said Sabre is actively engaged in talks with all U.S. majors, and multiple airlines have expressed interest in being the first to renew the agreements.
They understand the advantages in signing early, he said. He stressed, however, that every deal will be different. Some airlines pricing may stay neutral, he said, while other airlines may experience increases or decreases in distribution costs. We want to be in a better place with the airlines, Gilliland said. We are working with a number of different models.
Meanwhile, revenues from the Sabre GDS were up 5.3% in the second quarter, to $428.9 million. Sabre Holdings total revenues were $619.3 million, up 12.4%. Net income was $43.9 million, down 25.5%.
Total bookings were up 6%, with a 10.9% boost in international bookings. Cendant Corp., Galileos parent, reported net income of $387 million, down from $691 million in second-quarter 2004.
Total revenues were $4.7 billion, up 8%. Travel Distribution Services revenues were $661 million, up 48%. In a filing with the Securities and Exchange Commission, Cendant noted that despite a 6% increase in domestic booking volumes over the last six months, Galileo experienced a $4 million decrease in domestic air booking fees. It said the decrease was driven by an 8% decline in the effective yield on those bookings. Those numbers are consistent with our pricing program with major U.S. carriers, which was designed to gain access to all public fares made available by the participating airlines, Cendant said.
In Cendants second-quarter briefing with analysts, chairman Henry Silverman said Cendant has begun the migration of ebookers, the European online travel site that it acquired earlier this year, to Galileo and expects to complete the process in the third quarter. Amadeus had been its primary GDS. Silverman also said the early migration of Cheap Tickets to the Orbitz platform has resulted in an uptick in conversion rates. Lodging.com and Travelport will migrate to the Orbitz platform in September, he said, and ebookers will follow next year.