In September 2015 when the Lufthansa Group began imposing an $18 (€16) surcharge on every ticket booked through an intermediary，Sabre, one of the world’s three largest GDS distributors, said at the time that it was not worried about Lufthansa’s decision。

188bet Online Sports Betting and Casino In other words，Even if a lot of ticket business is lost，This matter will not have a big impact on Saber。

Not long ago，A Saber executive expressed similar sentiments again。The difference is，This statement is in response to the British International Airways Group (IAG) announcement in May that it would impose a surcharge on tickets booked through third-party technology companies for its British Airways and Iberia airlines from November。

Sabre said，London-based IAG Group’s air ticket bookings account for less than 2% of total bookings。The technology giant once again believes that IAG’s decision to impose surcharges will not have a big impact on its overall business。

Sabre Chief Financial Officer Rick Simonson expressed some views at an investor conference hosted by Bank of America Merrill Lynch。

One of Saber’s views is，Madrid-based rival Amadeus has been hit hard by changes in distribution strategies by major European airlines，Because this company handles a lot of ticket business for these airlines as an intermediary。

But，Simonson’s implication is，The American and European markets are different。

Simonson said，Sabre has a higher market 188bet sports betting app download share in the US than Spanish rival Amadeus and British GDS distributor Travelport，The average fees these three major distributors charge airlines using their systems are lower in the United States than generally in Europe。He also thinks，Given that the fees charged by distributors to airlines are relatively low，U.S. airlines are currently in no rush to eliminate these technology middlemen from the distribution chain。

However，In January of this year，United Airlines says，It wants to negotiate with global GDS distributors，Sign an agreement that is more beneficial to you。

United Airlines President Scott Kirby said at the time: "In an ideal world，United’s relationship with distributors is in balance，GDS distributors are compensated for helping airlines distribute tickets，But this compensation is reasonable，Users can therefore choose to book directly on the official website or through the GDS system。” 

“I am not 100% sure how the situation will evolve in the future，GDS distributors may become airline partners，But，If you want to become an airline partner，Both parties must maintain a balanced relationship。”

Part of Simonson’s views on distribution fees come from a research report completed by Bank of America Merrill Lynch in 2016，Merill Lynch happened to be the joint underwriter of Saber’s shares during its IPO in 2014。

The report found thatIn the past ten years，Due to industry deregulation and fee structures moving towards incentivizing airlines to provide full content products through third parties，Distribution system pricing dropped approximately 20%。

During dialogue with investors，Simonson also implicitly pointed to another structural reason why American Airlines has not yet begun imposing surcharges - Expedia's opposition，Because Expedia is the largest purchaser of air tickets in the United States，Also Sabre’s largest online travel agency customer。

If the airline imposes a surcharge，Air ticket prices on the Expedia booking website will suddenly increase，The consequences of this are，No matter with the airline official website、Google Flights、Price competition among metasearch sites such as Kayak，Still obtaining the airline’s booking capability authorization，Expedia will be at a disadvantage。

Sabre’s second point is，so far，Most of the air tickets booked by corporate customers that turn to 188bet app direct sales channels are "local" air tickets，That is, those tickets booked within the European market through short-haul flights with low transaction volume。

Given that the volume of ticket bookings in this way is not particularly large，The actual revenue obtained by Lufthansa Group from outside the distribution system channels is also relatively small。

Furthermore, Saber argued thatThis method of levying surcharges works best in domestic markets where Lufthansa Group and IAG have relatively large shares，And when large companies want to save on third-party booking fees and there are not many other airlines to choose from。

Simonson said，Lufthansa fourth quarter financial report shows，Lufthansa Group direct sales channel bookings increase by approximately 5%，The growth rate of third-party distribution channels is also about 5%。

This explains，The growth of airline direct channel bookings is not necessarily inversely proportional to the growth of intermediary bookings。

Sabre also known as，European airline groups do not have that much ability to implement similar plans in overseas markets。

At the same time, the company also predicts,Only on the four major US airlines - United Airlines、American Airlines、At least three companies, Delta and Southwest, are introducing surcharges，It is only at this time that surcharges may have a big impact on Saber。But，This situation cannot happen，Because if the airline does this，The U.S. government will influence industry pricing with their concerted actions、Charging them for violating competition laws。

American Airlines was a pioneer in implementing direct ticket booking programs，Also tried to weaken the role of global GDS distributors，But the company ultimately abandoned the plan even before its 2013 merger with US Airways。

If several airlines cannot act in unison，No airline is willing to impose surcharges on middlemen on its own，Because this will increase the price of your own ticket，The danger of eventually losing market share。

To confirm this statement，Simonson quotes recent comments from Delta Air Lines executives，The executive said that Delta Air Lines will not adopt a similar approach to Lufthansa Group’s surcharges on middlemen。

Sabre’s confidence is in sharp contrast to Lufthansa Group and IAG Group’s attitude of imposing surcharges 188bet Online Sports Betting and Casino at the risk of rising air ticket prices。Actually，The ticket sales of Lufthansa Group and IAG Group in the European market only account for about 10% of the entire market。

Sabre and other distributors also predict,Airlines will face great technical challenges when trying to directly book complex itineraries - the order transaction volume of these itineraries is also relatively large，It will be difficult for airlines and travel agencies to deal with this technical problem in the future。

But，Farelogix, technology supplier to Lufthansa Group and IAG、Vayant et al，And airline lobby group International Air Transport Association (IATA) said，Aviation technology has been greatly improved in recent years，Airline digital distribution costs are much lower than in the past。

It is worth mentioning，Some predictions from Saber executives are not always accurate。

When Lufthansa Group announces surcharge，SabreCEO Tom Klein predicted，This move is just a temporary tactic adopted by Lufthansa before negotiations between the two parties，Also said that Lufthansa Group would abandon the plan under pricing pressure from other airlines。

The company also claims，Since Lufthansa implemented this plan，Bookings have been declining，Also started a lawsuit with Lufthansa Group。

However, Lufthansa has stated this year,The imposition of surcharges has hardly put any pressure on the company's finances。Also said that the plan to impose surcharges has been initially successful，And began to sign corporate clients in foreign markets。Lufthansa also stated，The total number of ticket bookings has not been affected by the surcharge。

IAG is currently negotiating with Saber and Amadeus on contract renewal matters。In recent years，Sabre and Amadeus have been demanding that the prices displayed by IAG on its official website or online sales channels such as Google Flights also apply to distribution service providers that provide services to thousands of travel agencies around the world。

Lufthansa and IAG have always wanted to negotiate their way out of these so-called "full content agreements"。

When asked this question，Simonson said: “If a full content agreement is reached with the airlines，Then the airline will regress to the previous stage of participating in the airline agreement by level。In this case，Airlines have to pay us high fees。”

According to the current agreement between the two parties，Once both parties reach a full content agreement，Airlines must pay higher fees to distributors。

Simonson said: “Investors often ask us，The growth of the business you are running now will decline，Standing still，Will still be squeezed out by airlines？But the opposite is true，The company’s business has been growing steadily。Sabre achieved revenue of US$2.4 billion last year，This year’s revenue growth is between 5-7%，This rate is 1% of the GDP growth rate.5 times。”

However, Simonson also admitted,Companies must adjust their operations to cope with the trend of airlines changing the way they sell and distribute tickets。As the proportion of airline direct bookings gradually increases，The ticket distribution business of distributors such as Saber has been in danger of declining。

Aviation IT system services are still inseparable from the support of GDS distributors

The global distribution system’s aviation business consists of two parts: ticket distribution and aviation IT system services。GDS distributor thinks，Loss in ticket distribution business may be compensated in sales of booking software system，Airlines often require these software systems to help process direct bookings and handle value-added services like baggage charges。

Simonson’s views coincide with what Saber CEO Sean Menke said in an interview。Sean Menke said in an interview in May: "After bypassing indirect distribution channels，Airlines now realize，They save a lot of money that they would have paid to GDS distributors。This is why airlines have been able to achieve significant growth through global distribution systems relying on ancillary and branded products。”

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*This article was compiled from Skift by Zhihui analyst_Li Haiqiang (WeChat: lhq434849653)。Welcome to communicate！

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