Lufthansa Group gives notice to Sabre and Abacus for withdrawal from end of June 2020
In line with T2RL's current position that some airlines will not want to participate in all of the Global GDS providers, the Lufthansa Group have indicated they will discontinue participation in the Sabre and Abacus GDS from the 30 June 2020. No information was provided on how agents will service bookings that depart after that date. Lufthansa have been very careful to state they are willing to negotiate with Sabre so one possible outcome is that Lufthansa and Sabre agree terms. This could be seen as a negotiating tactic, one that is quite likely to be effective in T2RL's view. With Sabre reporting a 45% reduction in GDS revenues for the first quarter of 2020 Sabre will have to think carefully about their position in Europe. Lufthansa have secured government support and have started to sale and lease back aircraft to maintain liquidity. The reality is there has been an ongoing set of issues with Sabre for sometime, so this should not be a surprise given the relationship dynamics. T2RL believe that more airlines are likely to terminate their relationships with all GDSs and pick those that will agree to negotiate on terms that are more acceptable to the airlines. The most challenging issue with GDS agreements has been and continues to be that of non-discrimination. T2RL's view is that airlines should be able to reward efficient points of sale that generate revenue at the best cost. By signing a GDS agreement with non-discrimination it means all points of sale have to be treated equally even if they are more costly in terms of system use or fees and charges for lower revenues generated. T2RL believe that the current crisis will drive a new generation of GDS agreements with more variable content. Domestic distribution tends to rely more on the airline's own website and this will be the focus for most carriers in distribution for the short and medium term.
In these times of uncertainty, it is important for us to inform you in a timely and transparent manner about current developments. Today we would like to communicate that the GDS Sabre (1S) has terminated the distribution agreement with the airlines of the Lufthansa Group (Austrian Airlines, Lufthansa, SWISS and Brussels Airlines) with effect from 30 June 2020. This termination also affects the GDS Abacus (1B). The Lufthansa Group is open to constructive, solution-oriented discussions and is engaged in amicable talks with Sabre in the interest of Sabre and Abacus users. Beyond that, however, the Lufthansa Group airlines continue to work on making the distribution of flight tickets more innovative, attractive and more customer-oriented for you and our joint customers. Nevertheless, we are currently evaluating alternatives and will provide you with the best possible support. Of course, we will keep you informed about further developments in the distribution channels of the Lufthansa Group airlines in the coming weeks. Source: https://medium.com/duffel/austrian-lufthansa-swiss-and-brussels-airlines-are-leaving-sabre-what-can-travel-agents-do-now-52422ba14f74