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Dogfight Erupts in Plane Ticket Sales

A battle to reshape the way airline tickets are sold escalated Wednesday, in what could become an industry-wide showdown between carriers and middlemen.

A battle to reshape the way airline tickets are sold escalated Wednesday, in what could become an industry-wide showdown between carriers and middlemen.

In a retaliatory move against American Airlines, Sabre Holdings Corp., a middleman for many carriers' seats, said it is raising the fees it charges American to distribute its fare information and sell its seats through thousands of travel agents.

Sabre also said it will display American's flights less prominently than rival airlines in its vast booking system.

The jab follows efforts by American, the third-largest U.S. airline by traffic, to sell more of its tickets directly to consumers, a strategy designed to cut costs and give the airline more opportunities to court customers. As a result, the carrier, a unit of AMR Corp., has been butting heads with online travel agents as well.

Sabre is a breed of intermediary known as a "global distribution system," or GDS, which consolidates fare offerings from hundreds of airlines to share with travel agencies. For years, many airlines have paid these intermediaries to channel the bulk of their tickets to customers. Closely held Sabre, based in Southlake, Texas, owns the largest GDS.

The dust-up could spread to other airlines and intermediaries in the coming months as more third-party contracts come up for renewal and carriers seek to gain more control to boost profit margins.

"There's going to be a shoot-out in the airline distribution corral," predicted Henry Harteveldt, a travel industry analyst at Forrester Research.

Such disputes could make it increasingly difficult for consumers to comparison shop as fewer airlines funnel their offerings through common platforms. Delta Air Lines Inc., the No. 2 U.S. airline behind United Continental Holdings Inc., last month decided to stop supplying seat inventory to three small online agencies.

Continue reading at The Wall Street Journal

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