Amadeus, Galileo Raise Fees Despite Warnings

Michael Meehan (Computerworld)
11 December, 2000 12:01
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Two computer reservation systems (CRS) firms are increasing their per-ticket reservation charges by 6 percent or more next year so they can build next-generation Internet systems. But analysts said the increases indicate the companies are doing too much business as usual.

This month, Amadeus Global Travel Distribution SA said it will increase its per-ticket reservation charge to airlines by 6.9 percent, and Galileo International Inc. said it will increase its average booking fee by 6 percent.

But figuratively, the charges are much higher than that, said Henry Harteveldt, an analyst at Forrester Research Inc. in Cambridge, Mass. "They've just increased the hatred the airlines have for them [by] 6 percent to 7 percent," he said.

He praised Worldspan LP's move to reduce CRS fees on trips booked through corporate online systems, including those of GetThere Inc. in Menlo Park, Calif.; e-Travel Inc. in Waltham, Mass.; and Worldspan's Trip Manager system.

Harteveldt said Worldspan is taking the savings offered by new technology and passing them along to its customers.

The CRS giants - Galileo in Rosemont, Illinois.; Amadeus in Madrid; Worldspan in Atlanta; and Sabre Inc. in Fort Worth, Texas - built their businesses by controlling the connectivity between travel agencies and travel suppliers.

Harteveldt said direct-link corporate booking tools like those offered by GetThere could easily be spun off to include travel agencies, thus eroding the CRS industry base.

Krista Pappas, an analyst at Gomez Advisors Inc. in Lincoln, Massachusetts, said it's incumbent on the reservations companies to show significant changes in the next year. "It's fair game for anyone out there to be an intermediary," she said.

An October study from PhoCusWright Inc. in Sherman, Connecticut, praised the initiative of the CRS companies to evolve from pure reservation-based technology suppliers to firms that dabble in every area of travel technology. PhoCusWright analyst Lorraine Sileo said those companies are becoming less dependent on booking fees.