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Online travel agencies expected to face competition for airline contracts - claim
AIRLINE INDUSTRY INFORMATION-(C)1997-2006 M2 COMMUNICATIONS LTD
Online travel agencies are expected to have to show their worth as almost all contracts between US-based airlines and online travel agencies are due for renewal this year.
The situation is likely to cause new competition for the online travel agencies such as Expedia Inc, Sabre Holdings' Travelocity and Cendant Corp's Orbitz, and industry experts have reportedly said that online market is in for hard times. Companies like these are the end points for global distribution systems (GDS) but according to Reuters traditional GDSs such as Amadeus Global Travel Distribution, Galileo International, Sabre and Worldspan are having to take on competition from a new generation of companies.
Norm Rose, president of Travel Tech Consulting Inc and an analyst with PhocusWright, a travel research company, has said that he expects a certain amount of business to leak away from the GDSs with travel agencies having to show airlines that they are worth the spending.
James Beer, chief financial officer at American Airlines, said that all the airline's contracts with the main four players are due for renewal this year and the airline is focussed on new options to widen choice. Additionally, Continental Airlines has recently said that it is planning to get the lowest possible rates from the GDSs.
Northwest Airlines has been the first network carrier to renew its contract with Sabre. Last week the company said that it had been awarded a five-year, full-content contract.
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