ATW Daily News

Amadeus, Sabre plan joint venture to process non-air travel transactions

Wednesday August 15, 2007

News from Travel Technology Update: Amadeus and Sabre plan to create a joint venture that would provide secure, automated payment processing, clearing and reconciliation solutions for non-air travel sales. The two companies filed with the European Commission for antitrust approval to create the new entity. European Union law requires such a filing. Regulatory approval in the U.S. is not required.

In a statement, the companies said that "the intent of the joint venture is to establish an industry standard solution to improve and better meet the requirements of the travel industry with payment efficiencies, increased automation, and improved interoperability."

"There's no industry standard now for payments not covered by the Airlines Reporting Corp. or BSPs," a Sabre spokeswoman said.

A BSP, or billing and settlement plan, operates under the auspices of IATA to provide a central point through which travel agents submit sales reports and payments for airline ticket transactions in countries outside the U.S. ARC performs that function in the U.S. But no such system exists for the processing of hotel, car rental, tour operator or other non-air transactions. "This will result in improved efficiency" for all parties involved, the spokeswoman said, including hotels, tour operators, wholesalers and travel agencies.

An Amadeus spokesman said the venture also would assist travel agencies in securing their commissions for non-air trip components.

Both companies said they announced the joint venture because the EC filing would become public knowledge, but they noted that few details were available at this point.

But the announcement, perhaps inevitably, engendered some speculation about the intent of the joint venture. The Sabre spokeswoman said the intent of the joint venture was not to reduce credit card fees, nor was it an attempt to set up direct settlement between consumers and suppliers. "It will be beneficial to travel agencies," as well as to non-air suppliers, she said. Owen Wild, director of marketing for Amadeus North America, said that "when the solution is unveiled, it will become clear that the intent is only to create efficiencies in transaction processing." He said a decision by the EC was expected in the third quarter of this year.

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