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January 25, 2002 - reprinted with permission from e-tid.com
Sabre determined to break Opodo's sweetheart deals
The EU's final decision about Opodo has been delayed by a month due to a 'procedural complication.'
e-tid found this out while talking to David Schwarte, the lawyer Sabre has used for the past ten years when talking to competition authorities. Based at Sabre's HQ in Dallas, his official job title is executive vice president and general counsel.' All we want is no sweetheart deals,' he said. 'Sabre isn't taking an interest in Opodo because we're worried about Travelocity. Or because we didn't get the CRS contract. It's an industry-wide issue - we welcome competition so long as it's fair, and what the industry needs to know is that Opodo's airline shareholders are not giving Opodo an unfair advantage over not only online rivals but high street travel agents too.'
The European Commission said in November that it was 'minded to adopt a favourable attitude' towards Opodo after insisting that it dropped demands that its partner airlines gave it MFN status - Opodo originally would only enter into contract with airlines who guaranteed Opodo their lowest fares. Sabre in the States is part of Interactive Travel Services Association (ITSA) which has been protesting to US authorities about Orbitz, a comparable US site. Unlike Opodo, Orbitz has managed to keep MFN status in its contracts with its partner airlines. ITSA says this is the 'special sauce' which has seen Orbitz generate sales of $500m-plus in six months.
Having secured the dropping of MFN, Schwarte explained that there were two other issues, both of which Sabre could not deny having an interest in. 'We're concerned about web-only fares and how they will affect off-line travel agents who will be competing against Opodo. 'And there's also the CRS question, he added. The Commission has already prevented Opodo from trying to negotiate a cut-price deal with Amadeus, one of its CRS partners. It said 'Amadeus will provide its CRS services to Opodo…at market rates and on market terms and conditions and on a non-exclusive basis.' Schwarte added 'It's good the Commission is looking into the back-end, but we want more. We want the Commission to get an undertaking from the airline shareholders that they will provide the other CRSs with the same fares that they give to Opodo's CRS, Amadeus. 'Schwarte rounded off by highlighting a quote attributed to Opodo CEO Giovanni Bisignani. A Reuters report quoted Bisignani as saying that Opodo's prices would be 25% cheaper than travel agents. 'Assuming it's not a misquote, I would be fascinated to know how they can offer this level of discount, even if Opodo's distribution costs are significantly lower.' e-tid.com's coverage of Opodo began when the project existed under the working title, Online Travel Corp.
