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GDS giants under investigation


Amadeus, Sabre defend allegations

Travel ticketing and technology firms Amadeus and Sabre are facing a European Union (EU) investigation after the bloc’s antitrust unit alleged their contract terms could prevent airlines and travel agents from changing ticket providers. 

 

 

According to Reuters, the European Commission (EC) says the practices of the global distribution systems (GDS) giants may breach competition rules and raise prices for consumers. 

 

“We are concerned that such restrictions could create barriers to innovation and raise ticket distribution costs, ultimately raising ticket prices for travellers,” said European Competition Commissioner Margrethe Vestager, who could impose fines of up to 10% of companies’ turnover. 

 

With around 70% of airline tickets sold through GDSs and other third parties like travel agents, airlines have in recent years made moves to encourage more direct bookings by consumers. 

 

But the initiatives, no doubt spurred by profit margins lower than their GDS counterparts, have largely been unsuccessful.   

 

In its defence, Amadeus said it had done nothing wrong and that air travel distribution was affected by commercial airline behaviour and other factors.

 

“The review of any one factor must take into account its dependence and impact on all other factors to avoid undermining the neutral marketplace and thereby harming consumers,” the company said.

 

Co-operating with the commission, Sabre said its goal “has been - and will continue to be - to offer competitive access for travel agencies to airline content in the Sabre system and to deliver a solution that balances value for airlines, agencies, corporations and travelers”.

 

Written by: Mark Harada
Published: 26 November 2018


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