TripAdvisor and other giants triumph at Globes

User review site TripAdvisor picked up the Innovation Award at the Globes Travel Awards last night, hosted by Travolution sister title Travel Weekly.

Other onliners winning on the night included - in the consumer awards, sponsored by Associated Newspapers - Lastminute.com (favourite European short break provider) and Expedia (best online booking website).

In the trade awards, Galileo (best technology provider) and Holiday Extras (best travel trade website) also left the Grosvenor House happier than when they arrived.

Full list of winners.

Kevin May, editor, Travolution

GDSs and the little guy

Guest blogger post from Colin Lewis, head of sales and marketing at Aer Arann:

The way low-cost airlines view of the GDS as a distribution method is currently changing.

Over the last year we’ve seen a number of airlines such as Jetblue, Jetstar Asia and Valuair signing distribution deals with GDSs.

The most recent sees Easyjet’s announcement a few weeks back of its new distribution deals with both Amadeus and Galileo. Whilst some airlines have slammed this decision, I think it’s important not to miss the point here.

A large percentage of business travel bookings are driven through a corporate travel agent in order that businesses can effectively track their budgets as part of a larger controlled fiscal process.

As a result, to ignore corporate travel agents as a source of new business would be a mistake for most airlines.

The bottom line is – if you want to sell to business travellers, you need to participate in GDS’s.

Most of the business is incremental – Aer Arann receives 90% of their business via direct internet bookings, and this has not changed with greater GDS participation. Business travellers are also higher yield

I can’t help but consider that the strong response elicited by other low-cost airlines may have been in a bid to achieve column inches.

It is noticeable that once low cost airlines evolve and became more sophisticated, they start distributing on the GDS to reach newer, higher yield market – and what airline does not want higher yield?

There is no doubt that the GDS and the corporate travel agent are an essential part of our distribution system, and long may that continue.

Colin Lewis, head of sales and marketing, Aer Arann

All aboard the GDS love-in - not quite

The European Commission gave the thumbs-up last week to an extraordinary deal between two of the giants of the GDS world, Amadeus and Sabre.

The pair are launching Moneydirect, a rather clever payment "solution" for travel providers and needed the EC to clear any competition issues.

There is plenty of detail to follow on this but there is one crucial question (apart from the name of the business, which sounds more akin to a financial services price comparison site):

What about Travelport (Galileo and Worldspan's parent organisation)?

Amadeus-Sabre say they want this to be the start of an industry standard solution for payments. But the other half the GDS sector feels indifferent, has ideas of its own or is biding its time to see whether Moneydirect works.

[The system has been up and running successfully in Australia and New Zealand]

During a briefing last week, Moneydirect chief operating officer Laurent Chartier (from the Amadeus camp) pointed us to some comments from Jeff Clark (Travelport), who said the project was a "good idea" and "positive for all parties".

However Chartier would not say how negotiations had gone so far with Travelport. Indeed there is a board of directors for the new company, which is staffed with Amadeus and Sabre execs.

Either way the development is a very good one for an industry, many execs behind the scenes admit, beset with old systems which are not up to the task of handling high volumes and coordintating multi-distribution platforms.

Let's just see how long it takes Worldspan-Galileo to join the club.

Kevin May, editor, Travolution

Technorati tags: worldspan moneydirect sabre amadeus galileo travelport GDS

A Good Friday to take stock of 2007

Time flies fast, the saying goes, but the first quarter of 2007 appears to have raced by quicker than you can say "Big Four into Big Three into Big Two".

Without doubt the biggest story to hit the travel industry so far this year has been the consolidation between the traditional travel providers - Thomas Cook and MyTravel shocking many people back in February when they announced their merger, followed by TUI and First Choice a few weeks back when they decided to get in on the act.

Our analysis of the TUI-First Choice deal merger provoked some strong reactions, but we stand by it all. The US players MUST be watching the situation here in Europe very closely.

The deals came shortly after we published an interview with Ian McCaig, chief executive of Lastminute.com, who spoke of a widening gap in the European industry between those that have the power to negotiate on high volume deals with suppliers and, basically, those that do not.

The smaller companies will find themselves forced into "going niche", as someone else put it to us shortly after McCaig's comments.

Meanwhile much attention - admittedly a lot from us - has been given to the British Airways content distribution negotiations with the four big GDSs.

So far Worldspan, Galileo and Sabre Travel Network have re-signed, with Amadeus remaining.

Tricia Holly Davis has been following the event closely for months, breaking a number of key developments during the negotiations, including the news that BA was playing "rack-rate" to GDSs after talks failed to bring about a solution before the original 28 February deadline.

Amazingly, while all the above events have been going on, Expedia has managed to keep itself almost out of the news entirely for almost half a year now, such has been the focus of attention on the shenenigans across the traditional market.

But the OTA suddenly finds itself in a unique position: it is one very few big travel companies, certainly in the US, not owned by private equity; and it is still the dominant player in many markets.

Rumours abound, however, Expedia will feature much more heavily in headlines in the remaining three quarters of 2007.

Kevin May, editor, Travolution

Technorati tags: expedia british airways online travel

GDS deregulation debate rears its head again

"Open Letters" always sound very dramatic - but the message in this particular letter is one that pops up from time to time and is doing the rounds elsewhere.

The European Commission is once again soliciting comments from the industry regarding deregulation of the GDSs.

The debate has not changed: one side says all airline owernship in Amadeus must be divested before full deregulation is allowed, lest the threat of biased disaplay, as indicated in the letter below.

The other side claims biased display is not a reality and cites several reasons, as outlined continuously over the year.

Anyway...

Dear editor,

The travel industry is one of continual evolution and change. Keeping up with the events that can fundamentally affect our business from day to day is a challenge. However, there is one issue that I would like to bring to your attention, as it could impact our industry and change the way many of us do business.

Recently, the European Commission (EC) began soliciting public comment on possible revisions to the Code of Conduct for Computerized Reservation Systems (CRS), also known as global distribution systems (GDS), and will accept comments through the 27th of April.

The last round of discussions and debate on the subject of CRS deregulation took place in 2004. Arguments focused on the "Brattle Report," which was commissioned by the EC from the Brattle Group in October of 2003 to provide an objective point of view on the regulatory environment around CRSs in Europe and to make concrete recommendations with regards to total or partial deregulation. (The 15-page executive summary is well worth the read.) The EC ultimately postponed decision-making. However, the current public consultation means it is again time to act.

It is not my objective to promulgate a particular point of view. I wish simply to call your attention to some of the fundamental questions that have been asked in the past and for which the EC will need to provide answers via a legislative decision that could take place later this year.

When an airline has ownership in a CRS, should this raise competitive concerns for consumers, business travelers and their companies? If the playing field in Europe risks being biased in favor of CRS-owning airlines and their distribution channels, would access to full content be impacted?

If the content in the CRSs is not available on an equal basis and is, in addition, fragmented across several distribution channels, how would this affect efficiency and the cost of distribution, as well as travel?

As a consumer and an actor in the travel industry, I would encourage you to take advantage of this unique opportunity and make your opinion known to the EC by no later than the 27 of April at one of the following addresses:

European Commission
Directorate-General for Energy and Transport
Office DM24 5/98
B-1049 Brussels, Belgium

tren-consultation-crs@ec.europa.eu

For further information on this important issue, please visit C-fare.org

Richard Lovell, chief operating officer, EMEA and Latin America, Carlson Wagonlit Travel

And that left Amadeus

Another day, another GDS signs with British Airways to renew its content distribution deal.

Looking forward to an early Easter egg is Worldspan, which became the third GDS to end what appears to have been reasonably fraught negotitations in recent months between all four leading players and the UK's flag carrier.

So just Amadeus remains without a deal, with Galileo [which, it must be remembered, could be merging with Worldspan in a few months anyway, subject to regulatory approval in the US] and Sabre Travel Network already enjoying their new relationship with BA.

So another signing before the crucial magical April 10 deadline looks a likely bet. Although there could yet be another twist to what has been a pretty captivating process so far.

Kevin May, editor, Travolution

EXCLUSIVE - Travolution to create GDS

In years to come industry commentators will remember where they were the day Travolution announced its intention to move into the GDS space by teaming up with start-up Lirpaloof.com.

So here's a bit of a heads-up...

After at least six months in the planning, under the guise of arranging the finer details of our forthcoming Awards and Summit, Travolution publishing director Simon Ferguson and I have been in top-level discussions with Lirpaloof.com to launch what we believe could be the first serious challenge to the stranglehold of the major GDSs.

Much has been made of the so-called mini or Smart-GDSs, but Travolution-Lirpaloof.com's plan, known as Project Baba, will revolutionise the process further.

The partnership will draw on the skills of both companies: Travolution will be able to work with its vast array of contacts within the airline industry to negotiate favourable distribution rates for fares.

Lirpaloof.com will use its superior technology, developed initially for the Blackberry market, to run the complex hardware and software required to take on the likes of Sabre, Amadeus, Worldspan and Galileo.

A statement to be issued tomorrow to the wires from Simon and myself will say:

"We are delighted to be working with Lirpaloof.com. Combining the power of these two very different organisations - one a cutting edge player in media, the other a market-leader in handheld technologies - will send shivers down the spines of the existing GDSs."

"We can reassure readers our position as a publisher of magazines, our blog and website for the travel trade will not compromised by this partnership. We go through phases every week when at least one of the current GDSs falls out with us, so at least this will be official."

Kevin May, editor, Travolution

Read more about Lirpaloof.com.

Some other amazing news.

Two down, two to go

British Airways has signed a three-year inventory distribution deal with Sabre TravelNetwork which will give the GDS's travel agent subscribers access to all of BA's fares. The inventory will be available to all Sabre connected-travel agents worldwide.

The new Sabre opt-in program guarantees travel agents in the UK and Ireland, through adjusted financial terms with Sabre, full access to the current BA content, including the complete range of published fares the airline sells through its own web site, any third-party website, and its own reservation offices.

Opt-in schemes, whereby agents pay a portion of the GDS fee in exchange for full access to content, are nothing new. The concept was madely widely known back in 2004, when BA was re-negotiating its previous GDS contracts. Sabre says this is the first time, however, that it has offered agents an "opt-in" programme.

BA reached a similar agreement with the Galileo distribution system a little more than two weeks ago, but not with its soon-to-be sister company, Worldpsan.

Amadeus, which is not typically a lagger, also has yet to secure a deal with Britain's flag carrier.

Now I'm not trying to start any rumours here or anything, but maybe, just maybe, the companies' failure thus far to reach an agreement is not actually BA's fault.

You see, since BA's previous GDS contracts expired on 28 February, the airline has been paying a handsome GDS "rack rate". Maybe the likes of Amadeus and Worldspan figure there's no harm in milking BA for a little while longer--you know, just till the end of the month.

Let's see what Friday brings....

Tricia Holly Davis, chief writer, Travolution

WorldspanReunited

Came across a new blog this evening. It needs little explanation...

The Worldspan Alumni Blog.

Most of the entries rather helpfully point users to job vacancies around the US or highlight other news, such as births, marriages and deaths of ex-Worldspan employees and their families.

But this has to be the best entry, from July 2005:

"Well well well. Time to pull my big ole foot outta my mouth. After having very recently gleefully posting that I had heard no news of any layoffs in quite some time, it seems that karma was just out to get me. Indeed I have heard some widespread reports stating numbers between 65 and 90!

"We wish those that have fallen prey to the most recent round of layoffs the very best of luck in landing on their feet."

Oh dear...

Unfortunately there has not been a post on the blog since February 2006. A shame - we would love to have read what RoboWizard, the blog's author, had to say about the Travelport deal.

Kevin May, editor, Travolution

Rumour mill has a new spring in its step

With so much speculation doing the rounds recently about the fate of some leading online travel brands, especially concerning Travelport and its portfolio of brands, we thought it might be worthwhile listing them all:

1) Travelport’s OTA brands, Orbitz and Ebookers, will seek an IPO on either the New York or London Stock Exchanges.

2) In lieu of an IPO, Orbitz and/or Ebookers will be snapped by potential suitors Expedia Inc, Priceline, or Sabre Holdings.

3) Sabre Holdings, which has received European Commission approval to be acquired by US-based private equity firms Silver Lake Partners and Texas Pacific Group (TPG), will itself be spun-off, possibly to Amadeus (though that alliance might have a tough time getting regulatory approval).

(TPG separately owns a stake in G2SwitchWorks, which was created by a former Orbitz executive to rival the traditional GDS systems, and has co-invested in non-travel related projects with private equity firm The Blackstone Group, which has a stake in Travelport.)

4) Silver Lake Partners and TPG will keep Travelocity as their core asset and build up a complementary portfolio by acquiring other consumer-facing travel brands…possibly Expedia.

5) Google will buy everything - end of story.

But seriously, since all four GDSs and their respective subsidiaries are already loosely affiliated through mutual stakeholders, a re-shuffling of assets as enumerated above is not inconceivable.

The big question is just how much shuffling can the market and regulators bear?

Tricia Holly Davis, chief writer, Travolution

Galileo can break open the champers

BA appears to be moving towards a resolution over its stance with the GDSs.

The airline has issued a statement confirming a new content deal with Travelport-owned Galileo (but not the soon-to-be-Travelport-owned Worldspan).

The short press release says the new "long-term, global full content agreement" will run for three years from 10 April 2007.

Discussions are apparently ongoing with Worldspan, Sabre Travel Network and Amadeus.

There are perhaps a few lines in the release that hint at the issue right at heart of the discussions experienced by all parties in recent weeks:

"The new opt-in programme offers travel agents in the UK and Ireland the opportunity to access all of British Airways' fare content that is made publicly available through the airline's sales channels, including BA.com."

Ignoring the "travel agents in UK and Ireland" line - the deal is actually for agents elsewhere in the world, a BA press officer confirmed - the statement reveals BA's continued desire to push its content through an many non-GDS channels as possible.

Secondly, BA's Tiffany Hall says the agreement will "reduce the airline's distribution costs".

The airline's head of marketing and distribution sounds like she has got exactly what they wanted.

So it's champagne all-round, so far. BA gets the first of its deals; Galileo is just damn relieved to have signed.

However travel agents could be facing higher surcharges on some routes than they had under the former opt-in clause, says a source close to the new agreement.

Bets are on for which GDS signs next...

Kevin May, editor, Travolution

The long and winding road

The first thing we at Travolution ought to do is send British Airways' chief executive Willie Walsh and the GDSs a bill for our long distance phone calls, such is the global significance of their current predicament.

BA's supposed reluctance to sign new distribution contracts with its former GDS partners portends the beginning of a new era in airline distribution, where corporate and leisure travel agents and ultimately their customers will bear more of the costs.

We here at Travolution have been ringing our sources around the world to find out exactly what BA has up its sleeve in an effort to determine how the future distribution landscape will look.

Our efforts to bring you the latest news on the negotiations have zigzagged their way across the globe.

Mr Orange was on the piste somewhere in the Continent.

Mr White was in the States suffering from a horrible cold and we politely interrupted Mr Pink during an important meeting in Asia. (Admittedly we actually communicated with Mr Pink via text, so that will have to be accounted for the in phone bill)

Ok, enough of the Reservoir Dogs analogy.

We just thought you might like to know that the editorial staff here at Travolution were not down the pub whilst countless travel agents and corporations were sweating over their futures.

Whilst we were waiting for our countless calls, emails and texts to be returned, we thought we'd look up the dictionary definition of "negotiation".

From the Latin negotiationem, a negotiation is defined as a "mutual discussion and arrangement of the terms of a transaction or agreement".

Based on that definition and everything we've been told by our trusty sources, we can hardly call the current round of GDS talks a negotiation.

Walsh has a point. The airlines, for a long time, have been gouged by the GDSs and the distribution of wealth definitely needs to be re-evaluated.

And maybe, just maybe, his hardball tactics will pay off in the long run and will not be at the expense of everyone else.

But is asking for a 100% discount on distribution fees, a demand BA allegedly made at the beginning of the talks (according to Mr Pink) really the way forward when people's livelihoods are at stake?

Is agreeing to pay nearly double GDS fees a good idea? Have we suddenly been cast into the bolier room bartering stalls of Cairo? Surely there is a better, more intelligent, way for BA to move forward.

Let's hope Walsh and the GDSs find some clarity over the weekend.

Tricia Holly Davis, chief writer, Travolution

BA to GDS: Computer says no

Well, well, well. It turns out that British Airways' tough-talking chief executive Willie Walsh is indeed a man of his word.

BA has undisputably proved that the days of the GDS dictating what the airlines will pay to distribute their inventory are very much over.

It has been three days since BA allowed its former GDS contracts to lapse without any kind of replacement in sight.

Britain's flag carrier has also snubbed those GDSs which had offered it a short-term extension - a sort of temporary peace offering, if you will - which would have allowed BA to keep paying a discounted distribution fee.

But no. Accepting anything from the GDSs would be a sign of weakness and Walsh will not show weakness.

Apparently, BA's strategy is to pay the maximum GDS "rack rate" in an effort to prove that it won't be bullied into a new contract.

Good strategy. Not!

In fact, in the interim the strategy could be said to have backfired somewhat. [Our news story here]

If I were a BA shareholder, I'd be less than pleased.

The maximum GDS "rack rate" BA faces is around £4 per segment, depending on the GDS, the route, and ticket type, but that is still about double what BA was paying under its old contract.

All of this money you're spending - quite unnecessarily - on GDS fees had better well be worth it in the long-term.

A source close to the negotiations agreed: "We can't seem to work it out. BA is gonig to spend a lot of money this month by paying a lot more than it needs to."

So what does Walsh have up his sleeve?

Sources close to the GDSs say they're stumped and, at this point, are not hopeful that a deal - at least a long-term one - is imminent.

As one source put it, "At this point, we're looking at a temporary solution".

Another source said, "We're not a million miles away [from reaching a deal], but we're not close either".

So now what? BA admits the higher GDS rates are "not sustainable in the long-term" and that it is, therefore, considering "a number of options should we not reach agreements with the GDSs in the near future".

As of today BA says all of its content will continue to be distributed via all the GDSs, but no one knows if that will be the case tomorrow or the next day.

BA has pledged to give its agency partners ample notice "should we need to implement any changes to the way we distribute our fares", but that is not an entriely comforting statement.

If anything, it seems to indicate that BA is well prepared to remove some of its content from the GDS.

There is also the question of how much agents will wind up paying for future access to BA's content.

For now, agents are not subject to surcharges but that situation could change quite easily.

The only thing that is for certain is that BA is prepared to fight to the last round to get what it wants.

We all knew Walsh would be a...well, you know. But I don't think anyone expected him to go this far.

Tricia Holly Davis, chief writer, Travolution

Silence is golden for BA and the GDSs

With seven hours to go until the supposed British Airways-GDS negotiation deadline (midnight tonight), and not a whisper from any of five main protagonists...

In other words: everyone remains happy - for the moment.

Some reports today have said fees will not be passed onto travel agents which are booking tickets via GDSs, which is a bit of a non-story as no (dis)agreement has been reached anyway.

The deadline will also be missed, as we predicted last week.

The GDSs that have responded to inquiries have greeted us with a simple "no comment".

Can we expect a last-minute flurry activity? Will at least one of the main GDSs sign at the eleventh hour?

Probably not - but it would be interesting to hear the reaction of the others GDSs if just one deal was signed, as one source close to the negotiations suspected might happen when he spoke to us a few weeks back.

Kevin May, editor, Travolution

Scottish agents wade into BA-GDS row

The Scottish Passenger Agents' Association issued a press release yesterday morning attacking British Airways over its ongoing dispute with everyone various parts of the industry over costs which might be handed back to passengers and corporate travellers if negotiations with the GDSs fail.

The SPAA claims a 300% hike in fees is "yet another unfair cost imposition - which will impact particularly on Scottish travellers".

[Read the full statement here]

The organisation's air committee governor, Brian Potter, says:

"We will be forced either to use BA’s own online booking facility to source purely BA itineraries - with the resulting increased administration workload, or to pass on the increased charge to our customers; and there is little doubt that the other major airlines will quickly follow suit, should BA’s decision go unchallenged."

The SPAA will find that driving people to use "BA's own online booking facility" is exactly their intention.

Just eight days until the "deadline" of the 28 February.

It will be missed - or least some of the contracts will not meet the deadline.

Kevin May, editor, Travolution

British Airways will receive an angry letter

Interesting turn of events in the ongoing British Airways-GDS contracts renegotiation saga.

The Business Travel Coalition is assembling signatories for a letter to BA chief executive Willie Walsh to highlight what it says are plans that threaten to "impose new surcharges and withholding content from GDSs and the travel management companies corporations they serve".

In other words: if BA starts to get heavy-handed with the business travel community, by passing on costs to them once the GDS contracts are signed, then it can expect to feel a collective ill wind in the future.

Some of the biggest firms in the corporate world are lending their support to the letter, including PricewaterhouseCoopers and Airbus UK, as well as a number of high profile business travel agancies such as International Travel Management and MTS Travel.

The letter says:

"You are directly threatening the loss of your most valuable customers by imposing costs already included in the price of our tickets and hampering technology that is critical to the efficient functioning of our modern corporate travel programmes.

"We urge you to move promptly to conclude your GDS negotiations with your best customers’ concerns top of mind."

It concludes with a very open threat:

"Our companies will direct future business to airlines that build their distribution programmes around our preferences; as you are aware, we do have a choice in air travel.

"As you conclude your current GDS negotiations, we urge you to rededicate British Airways to achieving our mutual success."

The letter is due to be sent to Walsh some time after the 20th February, the cut off date for signatories.

41 companies have signed the letter so far...

[Read the full letter here]

No response from BA as yet...

Kevin May, editor, Travolution

Why the Thomas Cook-MyTravel merger was always going to happen

The timing might have come as a bit of shock, but nobody seriously doubts the reasoning behind today's announcement that UK-based MyTravel is to merge with its German-owned rival Thomas Cook.

Indeed consolidation appears to be a theme for the travel industry in the mid-2000s, with the GDS sector shrinking last year - in terms of ownership - following the acquisition by Travelport of Worldspan.

[December cover feature on future of the GDSs here]

That particular deal followed the massive shake up of the online travel agency market in 2005 with the £577 million purchase of Lastminute.com by Sabre and that of Ebookers for £201 million by the then Cendant group (now Travelport).

[Interestingly both Sabre and Travelport are now in the hands of private equity groups]

So now we have the Big Three, rather than the Big Four in the traditional sector.

This is clearly the biggest story for quite a few years in the industry, but people shouldn't be surprised.

The pre-packaged, so-called bucket and spade holiday market - the core part of the traditional UK-Europe holiday business - is in decline.

All four operators have attempted - with varying amounts of enthusiasm and success - to diversify into areas such as dynamic packaging and city breaks.

However there has been a huge question mark for years as to whether the new and vastly empowered consumer base - kowtowing to the freedom the web has given them - would be able to support four companies.

Today's announcement supports this view...

Even with extended product ranges and impressive websites coming on stream, consolidation has never been a question of "if" but "when".

The most likely merger was probably always going to be between Thomas Cook and MyTravel - both have operated their businesses in similar ways and have not particuarly digressed into new areas.

So where it gets interesting now is how the Big Three will operate as businesses.

First Choice is increasingly moving into the long haul market; Thomson will be counterbalancing the drop in pre-packaged sales by actively pushing its new strategy of uber-dynamic packaging, using a combination of its own aircraft, accommodation and third parties suppliers, including other accommodation and flight providers.

As for the Thomas Cook Group, which it says will now be the number one travel company in the UK, expect the company to not drop its focus on its pre-packaged holidays - like Thomson - and make a major push on its short-haul business.

[Read the opinions of some city analysts on the Guardian website]

[Download the KarstadtQuelle AG presentation here (PDF)]

The next question, of course, is this: what is next for the online-only outfits? Rumours are still circulating about what Expedia should do next...

Kevin May, editor, Travolution

GDS angst and speculation

We have some interesting analysis to add to last week’s story about British Airways supposedly intending to slap a distribution tax onto all bookings made through the GDSs.

Senior industry sources tell us that BA is playing a clever – and they would consider, dirty – game.

Unlike the recent airline/GDS negotiations in the US, BA is apparently NOT threatening to pull out of the GDSs if agreement is not reached on distribution fees. That leaves the GDSs without the option of saying “go ahead, if you dare…”.

Instead, our mole suggests, BA is demanding “unfeasibly large cuts” in their GDS booking fees and, if they don’t get these, threatening simply to add the full GDS booking fee to any bookings made through this channel – which would make GDSs the most expensive way to book BA.

And – in fairly short order, you can bet – any other airline.

So what does this mean? Apparently corporations and travel management companies are up in arms. They claim that their bookings (made through the GDSs) deliver BA’s highest yields.

BA is now slapping them with the distribution cost for these yields, our free talking source tells us.

“This is a tax – a huge transfer of wealth from the travelling Joe Public and corporate Britain directly into the BA coffers,” another source complains, adding:

“It’s like being told by Colgate-Palmolive that I must pay more for their toothpaste in a supermarket than anywhere else, because of the cost of getting it there. This is not the way the real world works.

“BA has to stop trampling over the people who make its business work – be they cabin crew members, corporate customers or travel agencies.”

Finally our source reckons BA is putting all GDSs in a position where a significant ‘opt-in’ charge for access to BA’s full range of fares is inevitable.

The GDSs have two options: stick to their guns and risk a situation where travel agencies become the most expensive place to buy BA tickets – and even then there is no guarantee that BA will give them its full range of fares; or stiffen the existing UK opt-in model and ask travel agencies to shoulder an even greater proportion of BA’s distribution costs.

“Either way it sucks – for everyone except BA,” laments our snout. “TMCs and the airline’s corporate customers need to tell BA that enough is enough.”

Kevin May, editor, Travolution

Travelport-Worldspan unite - at last

We're glad to say that after pounding this story for a few days it appears some of us were spot on from the beginning. Phew

The only part we got wrong was the day of the announcement.

The pair have just announced that they will indeed "merge", although in reality that means Travelport will pay $1.4 billion for the deal and a further $125 million has been handed to Worldspan as part of a recapitalisation programme.

Travelport chief executive Jeff Clarke says in a press release:

"Increasing cost pressures on travel suppliers and agencies combined with the strengthening of alternative distribution channels, such as supplier direct channels, continue to influence how travel is purchased."

"This merger will create a more effective and efficient travel distribution provider and will ensure that we are better positioned to meet the evolving needs of our customers, the travel suppliers, travel agencies and end consumers."

Clarke stays on as the new chief executive. Current Worldspan boss Rakesh Gangwal will quit once the integration process is complete.

As for the rivals? Check the Sabre share price.

UPDATE: An interesting piece of analysis from Norm Rose on the Travel Technology Blog, especially with regards to Gangwal.

Kevin May, editor, Travolution

Very unofficial Worldspan-Travelport deadline passes

Following the gossip trail over the last few days on the alleged Travelport-Worldspan merger has been fascinating.

And there really is nothing like consolidation in the industry to get tongues wagging.

Our first mention came on Sunday, but as soon as Monday arrived to say the rumour mill was red hot would be an understatement.

What also put us in a wee bit of a dilemma was knowing that our cover story for the December edition would be rather out of date by the time it comes out (Friday 15th, sign up for a copy here), if the four GDSs suddenly became three.

Cue frantic calls around the industry. Our reporter colleagues in the US have also heard very strong rumours about a takeover by Travelport, owner of the Gailileo GDS.

A pretty good senior source at one of the parties in question told us on Monday that an announcement was due in the next 24 hours.

Indeed, the date most people seemed to be looking towards was yesterday (Tuesday 5th), but as we finally closed the issue last night, the PRs were still giving us ever so slightly nervous and over-jovial responses along the lines of “it’s only industry gossip - ha ha ha!”.

A recent message left in the comments section of Sunday’s post suggested a scheduled employee announcement for Monday PM at one of the two companies was cancelled [post was anonymous].

As Tim Hughes on The BOOT in Australia pointed out, hits to his blog have gone through the roof, mainly from Google referrals on the keywords “Travelport Worldspan rumour”, etc, etc.

I can reveal that we have experienced a similar and hefty surge in traffic [not a record day, yesterday, but pretty close]. There are clearly plenty of people of out there looking for more information.

Kevin May, editor, Travolution