Sabre (computer System) - Controversy

Controversy

A 1982 study by American Airlines found that travel agents selected the flight appearing on the first line more than half the time. Ninety-two percent of the time, the selected flight was on the first screen. This provided a huge incentive for American to manipulate their ranking formula, or even corrupt the search algorithm outright, to favor American flights.

At first this was limited to juggling the relative importance of factors such as the length of the flight, how close the actual departure time was to the desired time, and whether the flight had a connection, but with each success American became bolder. In late 1981, New York Air added a flight from La Guardia to Detroit, challenging American in an important market. Before long, the new flights suddenly started appearing at the bottom of the screen. Its reservations dried up, and it was forced to cut back from eight Detroit flights a day to none.

On one occasion, Sabre deliberately withheld Continental's discount fares on 49 routes where American competed. A Sabre staffer had been directed to work on a program that would automatically suppress any discount fares loaded into the computer system.

Congress investigated these practices and in 1983 Bob Crandall, president of American, was the most vocal supporter of the systems. "The preferential display of our flights, and the corresponding increase in our market share, is the competitive raison d'être for having created the system in the first place," he told them. Unimpressed, in 1984 the United States government outlawed screen bias.

Even after biases were eliminated, travel agents using the system leased and serviced by American were significantly more likely to choose American over other airlines. The same was true of United and its Apollo system. The airlines referred to this phenomenon as the "halo" effect.

The fairness rules were eliminated/allowed to expire in 2010.

In 1987 Sabre's success of selling to European travel agents was inhibited by the refusal of big European carriers led by British Airways to grant the system ticketing authority for their flights even though Sabre had obtained BSP clearance for the UK in 1986. American brought High Court Action which alleged that after the arrival of Sabre on its doorstep British Airways immediately offered financial incentives to travel agents who continued to use Travicom and would tie any override commissions to use of the Travicom system. Travicom was a company created by Videcom, British Airways and British Caledonian and launched in 1976 as the world's first multi-access reservations system based on Videcom technology which eventually became part of Galileo UK. Travicom connected 49 subscribing international airlines (including British Airways, British Caledonian, TWA, Pan American World Airways, Qantas, Singapore Airlines, Air France, Lufthansa, SAS, Air Canada, KLM, Alitalia, Cathay Pacific and JAL) to thousands of travel agents in the UK. It allowed agents and airlines to communicate via a common distribution language and network, handling 97% of UK airline business trade bookings by 1987.

British Airways eventually bought out the stakes held by Videcom and British Caledonian in Travicom to become the sole owner and although Sabre's vice-president in London, David Schwarte, made representations to the U.S. Department of Transportation and the British Monopolies Commission, British Airways defended the use of Travicom as a truly non-discriminatory system in flight selection because an agent had access to some 50 carriers worldwide, including Sabre, for flight information.

Sabre, Expedia, Orbitz and some consumer advocates think that American's tactics with Direct Connect are aimed at making fare comparisons harder for online travel sites and for customers. American says its new system lowers its costs and lets it display its increasingly complex airfare and travel products to consumers. Especially the generation of ancillary revenue plays an important role behind American Airlines' effort to establish Direct Connects.