New Airline Booking System May Undercut Sabre

G2 SwitchWorks, formed last year and headed by a former Orbitz executive, said Wednesday that five of the airlines have also agreed to pay it more than $20 million in advance fees in exchange for discounts and a shot at an ownership stake in G2.


Tom Parsons, who runs the popular Best Fares Web site and travel service, said agents "aren't going to turn off Sabre just to help the airlines. If you use G2, you have to make a deal with the travel agent."

Harteveldt said that if the airlines can pay only $3 per ticket with G2 instead of $12.50 with a GDS, "they have the opportunity to look at their budgets and pay the travel agents, say, $5 to encourage them to use G2." The carrier would still save money, he said.

Harteveldt expects that the airlines would later try to phase out those payments as the new reservations system gains strength. Amid heavy financial losses and crushing fuel prices, he said, the airlines will try to keep whatever savings they can create rather than pass them along to agents or fliers.

"Travel agents are going to see less money coming in from the GDS and from the airline," he said.

Sabre Holdings (ticker: TSG) closed at $19.98, down 9 cents Wednesday.

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