Distribution Numbers That Are New To Me

Whatever will be the outcome of The Great GDS Debate, as I have been labeling it on my hard drive since 2003 (it's a big folder), the last few months of legal and regulatory wrangling between American Airlines and the global distribution system providers has produced quite a few tidbits that are educating us about contractual specifics between the companies. Between the information from the now-tabled AA-Sabre case and also a Nov. 17 Department of Transportation filing that we somehow missed at the time, I, for one, feel better educated about who pays what to whom and other market details. Of course, all that could change as the carriers and GDSs negotiate new terms, but here's what I've learned thus far.
According to the November filing, submitted by AA, Continental, Delta, United and US Airways in response to comments by the Interactive Travel Services Association--the trade group that was representing online travel agencies and global distribution systems before the creation of and Open Allies For Airfare Transparency--airlines pay an estimated $3.10 in per-segment GDS fees, "an approximation of industry costs." We had heard it was close to $3, but what we didn't know before was that Southwest "pays only a token GDS processing fee of approximately $1 for the entire transaction (with no segment booking fees)." It wasn't clear whether that number references Southwest's deal with Sabre or with Travelport, or both.
Now, the $3.10 figure can be a bit misleading if one doesn't consider the differentiation in pricing depending on the originating and city-pair markets. For example, court documents showed that in the current deal between American and Sabre, AA pays Sabre an average of $2.73 "for each domestic point of sale flight segment booked through Sabre's GDS and $6.84 on average for each international point of sale flight segment." One can assume other carriers and other GDSs work on a similar, differentiated basis.
The bottom line on what's going on may have been most succinctly stated in the carriers' DOT filing: "Today, carriers choose to make their 'basic' product available through GDSs. If GDSs want to play a role in the emerging market for optional fee products, they will need to negotiate with carriers and lower their booking fees in return."
As to the travel management companies that argue they are caught in the middle, I thought this, too, was an interesting tidbit from the DOT filing: "The 10 largest travel agencies account for approximately 75 percent of GDS usage." One always hears that the TMC market is very fragmented, but clearly that assessment is more applicable globally than it is in the United States.