Hawaiian Airlines is Being Sued for Contract Breach

The creator of one of the biggest travel reservation systems in the world is suing Hawaiian Airlines on the grounds that the airline violated a “heavily negotiated” contract in an effort to renegotiate it.

The case was filed last week in U.S. District Court in New York by Sabre Global Technologies, who claimed that Hawaiian’s conduct had “ripple effects throughout the travel distribution ecosystem” and cost the business “significantly more” in lost earnings.

The Sabre global distribution system, or GDS, was first created by American Airlines and IBM in the 1960s and later spun off into a separate company in the 1970s. More than 425,000 travel agents worldwide communicate with airlines, hotels, and car rental agencies using Sabre’s GDS.

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Travel businesses must pay to be a part of the GDS, and Sabre may take a percentage of any bookings made through its system. Nevertheless, the GDS allows travel agencies and consumers to search, compare, and book travel.

Hawaiian abruptly ceased offering its inter-island flights via Sabre in May, and each travel booked through Sabre now carries a $7 premium.

But Hawaiian provided a different option for travel agents. Travel agencies are urged to adopt its exclusive HAChannel+ product, which leverages a new standard created by the airline industry called New Distribution Capability, rather than Sabre (NDC).

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NDC has been developed by the International Air Transport Association (IATA) to “transform the way air products are retailed to corporations, leisure and business travellers”. In July, for example, Hawaiian struck a deal with Priceline to sell airfares via HAChannel+ rather than through a traditional GDS.

But the lawsuit, which has been largely redacted, claims that Hawaiian violated its agreement with Sabre by taking some routes off the GDS and charging a premium, which has hurt Hawaiian’s ability to compete.

One of the three major GDS providers, Sabre, has come to dominate the airline ticket market, but new technology is posing a threat to their industry. Airlines in particular seek to adopt technology that enables them to offer crucial amenities like WiFi availability and to set themselves apart from constrained rates like Basic Economy.

Traditional GDS systems were created at a period when the fare and travel class were the only pieces of information needed, therefore they have trouble handling all this additional data.

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However, many customers who use third-party websites to buy travel may not always get the whole picture of what is available or what limits have been placed on their tickets. Airlines have revamped their websites to display and sell additional products. NDC wants to alter that.

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