Lawyers across the land will finally have to find new things to get their teeth into after American Airlines and Travelport settled their differences this week.
The resolution of the pair’s long-running battle in the courts (and media) comes two months after their distribution agreement ran out and follows a similar legal handshake between the carrier and Sabre in October 2012.
A joint statement says all litigation is now resolved although the terms of the agreement require review by the court overseeing American’s restructuring process.
A few elements in play here:
- American Airlines and Travelport have a new and long-term distribution agreement, giving agents access to search and booking of the carrier’s full content of flights.
- Technically, this will be carried out by using both Travelport’s Universal API and American’s famed Direct-Connect XML interface.
- Travelport’s agent subscribers will have the ability to sell ancillary products such as the carrier’s Main Cabin Extra seating product.
Unlike Sabre’s resolution with American Airlines in late-2012, where a statement talked of a “monetary payment” being made by Sabre to the carrier, terms of the Travelport litigation are not being disclosed.
It turned out that Sabre probably had to pay the carrier in the region of $280 million to settle the dispute, a figure revealed in January this year in its fourth quarter 2012 earnings report.
No such revelations so far as to whether a similar deal was required to end the scrap with Travelport, although CEO and president Gordon Wilson remarked during the company’s full-year 2012 earnings call this week:
“We’ve set aside an appropriate reserve in case of a settlement.”
Still, it’s all smiles at the moment between Travelport and AA, a far cry from just a few weeks back when the pair were trading blows after the carrier accused Travelport of doubling the fees for when an agent books a flight through the Travelport GDS – a move which Travelport strenuously denied.
Derek DeCross, vice president of global sales at AA, says:
“Travelport deserves praise for working with American to create a solution that can display all of our product options to travel agents in a transparent, customer-friendly way that also clearly differentiates American’s products from other airlines.”
While Dan Westbrook, VP and general manager of global distribution sales and service at Travelport, adds:
“American is an industry leader, and the perfect partner with which to build upon Travelport’s airline partnership approach to merchandizing, optional ancillary sales and product differentiation.”
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About Kevin May
This is a major milestone in airline distribution. Travelport is implementing the OpenAxis/ATPCO/IATA NDC/Farelogix XML. This will bring not only ancillary services to Travelport agents but allow AA to dynamically bundle ancillaries and fares based on a customer’s value.