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Case
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Reference no. 9-909-035
Published by: Harvard Business Publishing
Originally published in: 2009
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.

Settings

Location:
Industries:
Size:
USD22 billion
Other setting(s):
2006

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