As if the disquiet accompanying the potential ramifications of Lufthansa's imminent introduction of a DCC (distribution cost charge) wasn't enough, Amadeus, Sabre and Travelport are now facing a class action suit in the US accusing them of collusion.
In effect that means a claim of anti-competitive behaviour and it could have serious implications.
The suit is brought by passengers, not the airlines, about contracts that the three companies entered into with airlines in the US in 2006 after the Department of Transportation (DOT) ended regulation in that sector.
The root of the problem seems to be the full content agreements so beloved by the travel industry.
The suit claims that the contracts oblige the airlines to make all their content available on all three GDSs while the airlines are also prevented from selling any of this content (ie flights) at lower fares on their own websites or other distribution channels. Those contracts allegedly stipulate that the carriers cannot surcharge travel agents or travel management companies who use the GDS rather than a less costly alternative distribution channel.
Does pushing for full content mean GDS are being anti-competitive? The point is that the final customers, in this case air passengers, are claiming that the GDS contracts with airlines prevent the possibility of a lower cost alternative and therefore have led to higher air fares.
Industry uproar against the Lufthansa move has been built around the argument that the indirect channel is the lowest cost distribution alternative.
According to the document, although the US government regulations had insisted on fee and content parity, they had also allowed carriers to withhold some content. After deregulation, however, the GDS insisted on full content contracts with airlines because this is what their customers — travel agents and TMCs — wanted.
The crux of the document's argument is that GDSs are colluding and acting in an anti-competitive manner by insisting that airlines must give full content.
As a class action suit, the US suit is focused on individual consumers rather than corporate travel buyers but it does raise issues about the existing relative costs of direct and indirect distribution. It claims that segment fees have not dropped as might have been expected given the general fall in the cost of distribution caused by the emergence of web alternatives.
The class action suit has been brought in the US against the US companies of the global distribution systems.
The questions it raises, however, are global.