Sabre, Expedia Warned by U.S. Against Display Bias
Sabre Holdings Corp., Expedia Inc. and four online travel companies were warned by U.S. regulators against showing bias in displays of fare and flight information amid Sabre’s data dispute with American Airlines.
Such actions would violate laws against unfair and deceptive trade practices, the Transportation Department wrote on Feb. 1 to Sabre, data distributors Travelport Ltd. and Amadeus IT Holding SA; and online travel agents Expedia, Orbitz Worldwide Inc. and Travelocity.com.
The letter opened a new front in the dispute over American’s use of its own technology to send information to travel agents instead of relying on distributors such as Sabre. Southlake, Texas-based Sabre briefly changed its displays in January to list American flights after other carriers’.
Biased fare data could steer consumers to “relatively inferior flights,” wrote Samuel Podberesky, the Transportation Department’s assistant general counsel for aviation enforcement. The agency will keep monitoring the displays and “will, if warranted, take enforcement action,” he wrote.
Podberesky’s letter didn’t cite Sabre or Fort Worth, Texas- based American by name. The department learned of possible bias against “at least one airline” flowing from “various business disputes in recent months,” he wrote.
American declined to comment today. American parent AMR Corp. spent more than $300 million in 2010 on fees to so-called global distribution systems such as Sabre, Travelport and Amadeus to market flights. The data companies share those payments with online travel agencies.
Sabre’s View
“We welcome the U.S. Department of Transportation’s guidance on the important topic of air travel pricing transparency,” Nancy St. Pierre, a Sabre spokeswoman, said in an e-mail. “We are in full compliance with all boundaries set forth by DOT in its recent letter.”
Jill Brenner, a spokeswoman for Blackstone Group LP’s Travelport in New York; Kate Sutherland, an outside spokeswoman for Travelocity.com, a Sabre unit; and Debbie Iannaci, a spokeswoman for Miami-based Amadeus North America, didn’t have an immediate comment. Expedia didn’t immediately return calls today.
Orbitz, under its contracts with airlines, has never shown bias in its displays of fare and flight information, said Brian Hoyt, a spokesman for the Chicago-based online travel agency. “That’s one of the big value propositions of our website.”
The Transportation Department isn’t commenting beyond the letter, said Bill Mosley, a spokesman. A copy also was sent to the Interactive Travel Services Association, a Washington-based trade group for online travel companies.
Court Dispute
Sabre said Jan. 5 it would change its presentation of American’s flight data until the end of their contract in August. American won a court order blocking that move, and the companies agreed on Jan. 24 to suspend action in their legal battle until June 1 as they try to negotiate a settlement.
American has said its Direct Connect system will provide pricing options directly to larger online agencies. The airline, No. 3 in the U.S. by traffic, seeks to boost revenue by using the system to sell optional services such as early boarding.
Expedia, which is based in Bellevue, Washington, removed American fares from its website on Jan. 1, saying Direct Connect may raise costs and make it harder for passengers to compare prices.
In December, American pulled its data from Orbitz, a month after saying it would stop providing information unless the two companies reached a new contract.
The Transportation Department said that online travel agencies and data distributors “have generally led the public to believe that they are transparent sources of the information they have and that the information they do provide is fairly presented.”
Any company biasing its presentations must “clearly and conspicuously disclose that fact,” Podberesky wrote. A general notice sent by distributors to travel agents by e-mail or letter isn’t sufficient, he said.
To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net
To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net
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