Subject category:
Case Method and Specialist Management Disciplines
Published by:
Harvard Business Publishing
Version: 22 June 2009
Length: 10 pages
Data source: Field research
Abstract
American Airlines sought to reduce the fees it pays to global distribution services (GDS's) (such as SABRE) to reach travel agents. But GDS's held significant tactical advantages. For example, GDS's had signed long-term exclusive contracts with the corporate customers who were American's best customers. Furthermore, travel agents tended to favor whichever GDS offered the highest commissions - impeding price competition among GDS's. Against this backdrop, American considered how best to cut its GDS costs.
Location:
Industries:
Size:
USD22 billion
Other setting(s):
2006
About
Abstract
American Airlines sought to reduce the fees it pays to global distribution services (GDS's) (such as SABRE) to reach travel agents. But GDS's held significant tactical advantages. For example, GDS's had signed long-term exclusive contracts with the corporate customers who were American's best customers. Furthermore, travel agents tended to favor whichever GDS offered the highest commissions - impeding price competition among GDS's. Against this backdrop, American considered how best to cut its GDS costs.
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Location:
Industries:
Size:
USD22 billion
Other setting(s):
2006