American Sues Sabre to Stop Being Biased and Sloppy

American, Distribution

It’s a time-honored tradition for American to spar with its former internal reservation system, Sabre. The Sabre global distribution system (GDS) was spun off years ago, and there has been friction between the two for eons. Now, as Skift reported, American is at it again. This time it’s suing for how Sabre displays flight options, saying Delta, of all airlines, is being given a leg up.

You can read the lawsuit here. There are multiple parts to this, but let’s start with the overarching theme. Sabre has rolled out something for travel agents that it calls the New Airline Storefront. If you’d like to see Sabre’s fluffy pitch video on the product, here it is:

As Sabre describes it, this is a way for buying airline travel to be like going to a supermarket. You see a variety of similar products all on the same shelf and you can pick and choose the one you want. That sounds great in theory, but there’s a problem. As someone who works at a different airline said, “do you think Sabre knows that companies fight by paying more for shelf space at supermarkets?” That is not a workable model here.

For many years, GDSes were prohibited by law from biasing displays, but that is no longer the case. What is still the case, however, is that bigger airlines have a no-bias clause in their distribution agreements with Sabre. American says in the lawsuit that “Sabre is obligated to display American’s fare, schedule, and inventory data fairly, neutrally, and accurately” per the agreement between the airlines that originally dates back to 1998. American is saying that Sabre is now biasing displays, and, well, that’s an understandable position.

Let’s use an example here, because that is going to be the most helpful way to see this. I pulled up published fares for Phoenix – Atlanta on July 21 as a one way showing nonstops only. Here are the first two results in the Sabre New Airline Storefront:

These results are different than how a traditional travel agent search would go, because they actually include fare data. Historically, the search would just show available flights by duration and departure time (defaulting to 1pm unless otherwise specified). But with fares in the mix, it gets harder to show without any bias at all.

Though it doesn’t say what the initial result sort is here, you can click on “cheapest” in the interface which returns the exact same result so I assume that’s the default. That seems to be an issue. This now sorts by lowest fare regardless of what “shelf” it’s on, from earliest departure time on up. It seems quite obvious that American’s fare is better since it’s regular economy and not basic, but that’s not how the sort has been designed.

Over on the right is a bigger issue. You see that there is a Delta Comfort+ fare here, but there is not an American Main Cabin Extra fare. That’s because Delta files Comfort+ as a completely different fare that you purchase. American has you buy the coach fare and then pay extra to upgrade to get extra legroom. The end result is the same, and that’s where laziness, or at the very least, slowness, comes into play.

American sells those extra legroom seats in Sabre, and on this particular flight, the price ranges from $30.45 for a middle seat up to $66.99. If Sabre wants to do this right, it could show it like this:

Or there is a simpler option. American has something it calls Main Plus which it offers as an upsell on AA.com or through third parties like Google Flights that use an NDC connection. Here’s the upsell AA has on its website:

Either of these would give an accurate representation of similar options, but it can be hard to do. The former option requires parsing the seat map data, the so-called “Air Extras” which get sold as an add-on, and then adding the range to the fare. The latter option requires Sabre finishing the NDC connection with American that it has been working on for a long time. In theory I understand that should be done in a few months, so maybe that will solve the problem. Or will it?

Of course, it’s not that simple. Sabre is put in the impossible position of having to create the definitions for those different shelves, and someone will be unhappy and claim bias. ATPCO tried to get an industry standard, but that effort seems to have been written off. Just consider the trouble with the above example alone.

Delta’s Comfort+ gives you extra legroom, dedicated overhead space, and complimentary beer and wine and maybe liquor depending upon what page you’re looking at on Delta’s website. American’s Main Plus gives you the same plus an extra checked bag. Is that still the same? It’s a judgment call Sabre would have to make, and if it decides in a way that favors one airline, the other will cry foul.

While that is a very sticky situation, there are other things about the implementation that are completely unforgivable. For example, I searched business class from DFW to Honolulu and it returned this weirdness:

Why would one flight return premium economy and the other first class? I have no idea. But these look to be on the same “shelf” when they are decidedly not. And if I search for First Class, I get this:

That third entry is particularly strange since it now compares American’s flexible fare to the non-flexible options for the two above. It’s also completely wrong. That price is actually an end-on-end combination of a flexible fare basis to LA and then a non-flexible one from there. Combining fares like that results in something that can’t be defined as First Flexible. This kind of sloppiness is just inexcusable. American said in the lawsuit that it has been trying to get Sabre to “pause” the storefront rollout until issues are fixed. The response? “To date, Sabre has refused to do so.”

On top of how the display works, there is the broader issue of incentives to create a bias among users. Delta reportedly re-did its agreement with Sabre, and apparently in the new agreement, higher payments are given to travel agencies that book products on higher “shelves.” I initially thought… so what? That’s just the commercial contract. But American says that this creates an incentive for travel agents to book Delta over American. As the airline bluntly states in the suit, “Sabre’s planned actions will violate its contract with American.”

Neither American nor Sabre would publicly comment since this is pending litigation, but the only way to really fix this is to have a wholesale reworking of distribution agreements along with better quality control via improved technology to avoid the sloppiness we see today. Good luck getting any of that done. It’s a herculean task when you’re trying to change the way tickets are displayed and sold, especially when legacy contracts seem to prohibit the plan. All the sloppiness needs to be fixed, and that shouldn’t be hard. But that’s the only easy issue of the bunch.

14 comments on “American Sues Sabre to Stop Being Biased and Sloppy

  1. Off topic, but that grocery store anecdote is very real. I used to work in the food industry, and as a former boss put it, “Supermarkets aren’t in the food business, they’re in the real estate business.” Given the razon-thin margins and the way the business works, especially for Big Food, it’s hard to argue otherwise.

    Want to get a grocery chain to carry a product of yours that they don’t? Be prepared for “slotting fees”, ostensibly to cover the cost of “slotting” the item onto the shelf. Want your product in the weekly flyer? Better open up your wallet and provide an “off-invoice” rebate/discount to support the promotion. Sampling? In-store signage? Coupons that print off at the register (when those were still a thing) or digital coupons/offers? Yup, the grocery chain is getting paid handsomely for all of those.

    My understanding is that it is no longer like it was decades ago (“You want your products on my shelf? My wife wants a hot tub,” was among the stories I’ve heard), in the era when salespeople had slush funds, as it’s become more formalized, but the point remains that the top real estate (online or B&M, and for food, airline tickets, or other items) continues to be very valuable, as consumers’ vision and attention spans have not expanded to meet the plethora of different products vying for their minds and money.

    1. I worked in marketing and advertising for 15+ years with several CPG companies as clients. What you just described most definitely still goes on. As someone once told me, the problem with the US is that in America, the customer of the food company is the grocery store. In Europe, it’s the consumer. Too entirely different business models.

      1. Probably varies from store/chain to chain. My Safeway still has the printers at the self-checkout stations (don’t know about the staffed registers), but I haven’t gotten a coupon from them for a year or so. Don’t think I ever actually used one (too much hassle keeping track of them), so no big loss for me.

  2. This is a very interesting case. Some sources say that Delta helped Sabre develop their airline storeshelf and what Sabre is trying to do is exactly what Delta has said it wants to do – de-commoditize its product and sell based on product merits, not just the basic fare. You rightly note that the definition of what fits in each product shelf is very hard to define but if part of the algorithm is that Delta will pay a higher fee for those products, I am not sure that American can argue there is bias since GDSs exist to make money. Given that United is now taking the “premium content” route, they might be more swayed to support what Delta is doing if it also gives a competitive advantage.
    Obviously, no one here knows the details of all of the contracts involved but it is certain that Sabre’s lawyers looked very carefully at these contracts and made sure they are doing what they think they can.
    It will also be worth knowing, if we ever can know, if Delta is getting any benefit from helping Sabre launch their new product such as in the form of preferential rates.

    Given that there are inherent biases in how content is delivered across multiple electronic platforms regardless of the product, this case may be very hard to prove esp. since Sabre probably cannot be forced to divulge its algorithms anymore than Facebook or Amazon are required to divulge theirs (and they are not).

    This case will certainly be worth watching.

    1. Yes, DL probably did help Sabre develop their storefront, the same way DL led the ATPCO effort (even pulled AA and UA up on stage during the announcement to say “look, we’re all here together!).

      AA probably has more leverage and stronger anti-biasing provisions with Sabre than you imagine. AA’s anti-biasing provisions aren’t aimed at limiting Sabre, per se, they’re aimed at limiting DL and UA agreements with Sabre — preventing those carriers from bumping themselves up in the results the way AA did in Sabre forty years ago! And this deal with DL is exactly what AA’s anti-biasing rules would prohibit.

      (BTW the grocery store analogy doesn’t really work: Sabre can charge and airlines can pay whatever they want — this is why carriers pay more to GDSs for sales outside their home point of sale — but that amount can’t influence the sort order or presentation of results the way General Mills can bid for prime shelf space 4 ft. off the ground.)

      1. These types of cases are very hard for a judge to decide; I doubt if the case will go to a jury. They require a deep level of understanding of the airline industry and product distribution and all of the factors and history that go into everything that makes it to the final product.
        I don’t know how the case will be decided but I strongly doubt that Sabre is either being sloppy or negligent in what it is required to do. Just as Facebook and Amazon use algorithms and manage to defend them, I suspect that Sabre can legitimately argue that it is not being biased but using dozens of datapoints more than basic fare and service levels, which is how CRSs/GDSs used to operate. Delta’s product is not the same as American’s and vice versa – factors might include on-time statistics down to the route level (they are available), the level of in-flight entertainment, and many other factors that people consider when they purchase travel – but those decisions are often subjective or are objective but weighed differently by different people.
        Sabre is not a part of American any more. They will do what is in their best interest. and if Delta presented them with a process by which they can increase revenues for both, it is hard to believe that Sabre can’t figure out how to make it all work w/in the limitations and opportunities of its contracts.
        If the tail has moved from Delta – which was by far the slowest and weakest in the CRS and distribution race – to now being one of the leaders and potentially gaining an advantage through GDSs and distribution, then the airline world will take notice, including other GDSs. I doubt if Delta talked solely to Sabre about its initial ideas.
        This is also the type of case that will take years to resolve. If Sabre’s future is on the line, they will fight very hard to protect their right to grow revenues and to gain a competitive advantage over other GDSs.
        And, ultimately, if American realizes what factors Sabre is using to give Delta displays an advantage, why doesn’t American just fix those things with its own product, even if it might cost more to distribute it?

        1. Why doesn’t AA just fix its own product? Because it’s easier to send its lawyers to enforce its contract with Sabre than to re-do its fare filing and distribution strategies, that’s why. (Same reason Sabre sued LH over NDC a few years ago!) Sabre doesn’t get to violate its contract with AA just because DL asked nicely.

          (Oh, and who owns and develops the core of AA’s product, the CRS? That’s right, Sabre! Who knows what that CRS and web services can and can’t do!)

          Somewhere north of 50% of Sabre’s segments are AA, DL and UA, so each of those carriers has significant leverage to demand anti-biasing terms, refined and set in stone over the past 40+ years. No sellers have comparable leverage over Amazon or Facebook, so that analogy is worthless. Whatever data points Sabre can use in its ranking algorithm are clearly written into every contract.

          Yes, this case will take years to resolve, starting with an injunction preventing Sabre from using this new (sloppy) algorithm.

          Also, for the record, I like this new DL-Sabre approach, but I know enough about distribution to understand the many hurdles it needs to clear.

          (Since we’re here, Amadeus doesn’t care about anyone’s ideas, including DL’s, and Travelport is too much of an ass-backwards mess to do anything.)

          1. again, I have no idea where this will all go – but I’m not sure that I would hang my hopes on a judge to settle this dispute because they rarely do that in major commercial litigation. They will try to encourage mediation and dispute resolution rather than summarily blocking one side or the other.
            American might think there are biases but there may be legitimate differences in product between airlines that they do not want to admit exist or revenue to Sabre might be a factor that can influence display that, again, American doesn’t want to have to pay in order to compete with Delta. I don’t know the specific of this case but rarely does one side accurately reflect all of the issues involved.
            Delta and Sabre have come up with a model that both will defend and can use to make more money but even more so for Sabre, esp. if your statements about other GDSs are correct – and I fully expect they are.
            If Delta can improve its performance in American competitive markets – and they clearly expect they can – they do will fight tooth and nail to protect this. I am sure they also “lawyered up” before committing to this project with Sabre.

            Hopefully CF does a follow-up and tracks this when it is eventually resolved – if that ever happens.

      2. This is a very complex case and the type of things judges don’t like to decide.
        If Delta presented Sabre with an opportunity to grow the revenue of both, it is doubtful that Sabre will give up easily.
        And if the real issue is that Delta has product differences which Sabre is using as part of its algorithms (which might include route specific on-time, in-flight entertainment or other factors), then why can’t AA just decide it is worth their while to compete with DL on the same product basis? It might not be bias if Sabre can legitimately prove the product isn’t the same – which it likely never is when comparing two airlines.
        I have no idea where this will end up but I doubt if there will be a quick resolution or that other GDSs will sit by idly if it appears Sabre is going to potentially gain an advantage.

    2. @Tim,

      Better sit down. What I’m writing will probably be a bit of a shock. I wholeheartedly agree with you. As you rightly observe, these cases involve a lot of detail and nuance, and judges hate to decide these kinds of disputes. So, as was the case with the recent dispute over the use of the term “Flagship”, I’m guessing this case will eventually be settled – and the judge will do everything in his or her power to prod the parties along that path. There’s an old saying that’s at work here: “You’re better off with the devil you know than the devil you don’t.”

  3. Sabre’s implementation of these ‘shelves’ seems pretty sloppy to me. But I ultimately feel that AA’s efforts will fail in this case just due to the point at which the industry is at in the distribution landscape. It’s currently a large grey area with airlines veering off in different directions with fare filings (you alluded to the fact that ATPCO provides a way to file fare families and upsells, which AA seems to use and DL does not), as well as the push toward NDC connectivity that is currently in a piecemeal stage of development depending on the carrier involved. AA will have a difficult time proving its arguments without access to the behind-the-scenes picture at Sabre.

    The GDS’ were decimated during the pandemic, and didn’t have the public/government’s deep pockets bailing them out in the way the airlines did, so I expect Sabre will not just lay over in this fight to retain control over its business. If anything though, I think this would be a good opportunity for Sabre to revisit its development on this, because it clearly isn’t ready for primetime…

  4. Sort of from the aviation wing of the “I don’t know how to define it, but I know it when I see it’! [Supreme Court Justice Potter Stewart].

    Definition of a “direct flight.”: “I took off on flight 91 one day. The flight, or however my airline chose to refer to it, made seven stops, requiring me to change planes five times, all the while keeping its flight 91-designation.

    Afterwards, I inquired: “That was a “direct flight?” Oh yes, [chuckle, chuckle]! You see, we have lawyers who are specialists at this stuff!

    Hah, sue us? In your dreams! In the airline business, things are as we, or A4A says they are. FYI, here’s a copy of our latest: “Defining Unfair or Deceptive Practices,” final rule, (85 Federal Register 78707-78718, Dec. 7, 2021.) Our lawyers do a wonderful job, with DOT’s cooperation!

  5. The whole concept of fare categories is never going to work because the airlines are going to have slightly different offerings in each category. The obvious solution is to ignore the fare categories and focus on the individual amenities that are included with every fare. Then the user can specify which amenities they want and the GDS can sort all fares that have those amenities by cost from low to high, with schedule or additional unrequired amenities used as tie-breakers. The airlines and the GDS would only have to agree on a standard way to define each amenity, such as inches of pitch, # of carry-ons, # of checked bags, different levels of included food and bev, etc.

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