Continental-Travelport extension -- Will 2011 airline distribution talks be a tame affair?

Continental-Travelport extension — Will 2011 airline distribution talks be a tame affair?

Will the much-anticipated U.S. airlines-global distribution systems contract showdowns of 2011 turn into a dud?

News from Travelport and Continental seemingly — but perhaps erroneously — might lead to that conclusion.

Travelport revealed that Continental signed a two-and-a-half year extension of their content agreement with Travelport’s Worldspan and Galileo GDSs.

The previous pact had been slated to expire in 2011 and the extension runs through the end of 2013.

“As a result of the extension of the agreement, Continental published fares and related seat inventory, including Web fares available on its own site, reservations office and through third parties, will continue to be available to subscribers of the Galileo and Worldspan GDS systems on the same terms as in the most recent agreements,” Travelport says.

It is interesting that the announcement about this “full content” agreement covers “published fares and related seat inventory” and doesn’t mention anything about ancillary services — perhaps future rollouts of Wi-Fi, bag fees, lounge access etc. — and whether these will become available to travel agents tied into Worldspan and Galileo.

Ancillary services and how they are merchandised should be one of the burning questions as 2011 negotiations between GDSs and airlines get under way in earnest.

Continental’s Scott Stachowiak, the airline’s director of distribution, hints that the agreement breaks new ground, without providing details.

“This agreement also provides us with a flexible and cost-effective distribution solution that meets the needs of today’s dynamic marketplace,” Stachowiak says.

One analyst, however, argues that the Continental-Travelport extension should be seen in the context of the pending United-Continental merger and less as a harbinger of how the GDSs’ negotiations with other airlines in 2011 will turn out.

“Basically Continental is saying we are going to negotiate acceptable dealsto get us through the next couple of years,” says Henry Harteveldt, Forrester Research’s principal travel analyst. “And once the merge is complete, they’ll negotiate a more acceptable deal for the merged airline.”

Harteveldt wonders whether Continental’s negotiations with Sabre and Amadeus might be more aggressive because of their greater clout in North America and internationally, respectively.

Meanwhile, as a prelude to 2011 negotiations, American Airlines has pledged to make some of its optional services available exclusively through so-called direct-connects, including Farelogix, and outside the GDS channel.

Things could be heating up soon.

Conversely, British Airways reached new contract agreements with Sabre, Amadeus and Travelport in 2009, and these talks went off with much less tempest than in the prior round of negotiations.

Both Continental and Travelport declined to discuss any terms of the new agreement.

Asked whether the next round of airline-GDS negotiations are shaping up to be less tumultuous than in 2007, Dan Westbrook, Travelport’s vice president of supplier development, says: “It’s a little early to make that call, but we’re certainly encouraged by the positive approach that resulted in our agreement with Continental.”

“We are working hard to create collaborative, constructive relationships with our airline partners,” Westbrook adds. “We’re also optimistic that our partnerships will continue to grow.”