Hawaiian Airlines is being sued by the maker of one of the world’s largest travel reservation systems because the carrier allegedly breached a “heavily negotiated” contract in a “calculated strategy” to renegotiate the deal.
Saber Global Technologies filed a lawsuit in U.S. District Court in New York last week, alleging Hawaiian’s actions had “ripple effects across the entire travel distribution ecosystem.” and cost the company “much more” than $75,000 in lost revenue.
Originally developed by American Airlines and IBM in the 1960s, Saber was transformed into an independent Global Distribution System or GDS in the 1970s. Saber’s GDS acts as an intermediary between airlines, hotels and corporate car rental companies, and more than 425,000 travel agents worldwide.
The GDS allows travel agents and consumers to search, compare and book travel, but travel agencies must pay to be part of the GDS and Saber can take a share of any booking made through its system.
In May, Hawaiian suddenly stopped listing its inter-island flights on Saber and added a $7 surcharge on any flight booked through Saber.
But Hawaiian offered travel agents an alternative. Rather than using Saber, travel agents are encouraged to access its proprietary HAChannel+ program which uses a new standard developed by the airline industry called New Distribution Capability (NDC).
NDC was developed by the International Air Transport Association (IATA) to “transform the way airline products are retailed to businesses, leisure and business travelers”. In July, for example, Hawaiian struck a deal with Priceline to sell airline tickets through HAChannel+ rather than a traditional GDS.
The heavily redacted lawsuit, however, alleges that by removing certain routes from the GDS and adding a surcharge, Hawaiian breached its contract with Saber and this put its company at a competitive disadvantage.
Saber is one of three major GDS providers to control how airline tickets are sold, but new technologies are challenging their business. In particular, airlines want to adopt technology that allows them to market important features like WiFi availability, as well as distinguish restrictive fares like Basic Economy.
Traditional GDS systems struggled to manage all this additional information because they were built in an era when the only information required was the fare and class of travel.
Airlines have rebuilt their websites to display and sell ancillary products, but many consumers who rely on third-party websites to book travel don’t always have a full picture of what’s available or the restrictions imposed. on their tickets. NDC hopes to change that.
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