GDSs Boost Fees

<B>GDSs Boost Fees</B>
<I>Buyer Locks Down Channel-Based Airline Deal</I>

By Jay Campbell

Parker Hannifin has negotiated with two airlines a bigger discount for tickets bought through Sabre BTS than through its own travel agency.

At first glance, observers guessed that airlines are sharing with the Cleveland-based manufacturing firm the $1 savings on GDS fees they have been getting from Sabre for BTS bookings, but travel manager Judy Weber said the discount is much higher than $1 per booking.

In fact, Sabre will drop that channel-based structure starting Feb. 1, a month after Worldspan expanded its own discount program. Also by Feb. 1, all four GDSs will have substantially raised their overall prices.

Parker Hannifin's new tiered structure also is unrelated to the non-GDS connections between suppliers and buyers planned by Sabre subsidiary GetThere, which now manages the Sabre BTS product. That also will prompt airlines to discount more heavily for online bookings. Instead, the Parker Hannifin deal is all about compliance, which surprised many experts. By all accounts, it is a first-of-its-kind arrangement.

In return for the two-tiered discount structure, the company should be able to improve on its 78 percent compliance rate, with partial thanks to biased displays on certain routes, and thus offer the carriers more market share. Furthermore, if and when Parker Hannifin meets the market share goals it has negotiated with all three of its preferreds, the two that offered the two-tiered structure will get the remaining business.

For the preferred airlines, it also helped that Parker Hannifin had dropped to three from four domestic preferred carriers.

With Parker Hannifin's lowest negotiated fares available online, all of the company's groups that were made aware of the scenario, five so far, have or will mandate the use of BTS for domestic travel. A companywide domestic mandate is expected within the next two months, and Parker Hannifin hopes to report 70 percent usage by the end of June.

Already, usage has reached 60 percent following the rollout of the new prices.

"There was a little give and take" between the online- and agency-booked discount levels, Weber said, but she emphasized that the arrangement does improve her company's overall airfare savings. She would not reveal exact terms.

Neither GDS nor agency relationships were changed for the program. Parker Hannifin is a cost center operating on a fee basis with its agency and uses net fares with all three preferred domestic carriers.

Though