The Calgary-based airline is on the verge of ending its contract with Sabre Global Distribution Service, the booking system that powers Expedia, Travelocity and travel agencies around the world.
For more than a year, WestJet has been renegotiating its contract with the company.
Sabre provides technology that runs WestJet's reservation system and also acts as a distribution service for the travel industry. Many travel agents use its software to book flights and hotel rooms.
In October, WestJet said that, as of Jan. 26, it would pull out of the Sabre GDS.
Cost is one of the sticking points. Travel industry analysts say that Sabre charges airlines around $5 per segment of travel, including each leg of a flight, each hotel room booked or car rented.
The airline wouldn't confirm how much Sabre charges, but did say that pricing is one of the sticking points in the negotiation
WestJet’s executive vice-president of sales and marketing Bob Cummings says it has a lot to do with keeping prices down for passengers.
"The economics are pretty critical to us, in respect to the cost of sale," said Cummings.
"The industry has razor-thin margins."
Expedia is the largest online travel agency in the world. And while WestJet wouldn’t say how much of the company's sales come from the site, air industry analyst Robert Kokonis says it would be significant.
“I can't for the life of me believe that WestJet would want to be in a situation where the competition is visible in Expedia and WestJet isn't. But again, there's a price for everything.”
Travel industry pleads for deal
Travel agents are also concerned about the contract ending.
Sabre’s GDS is widely used by large travel agencies that serve the corporate market.
The Association of Canadian Travel Agents sent out a plea about a week ago, both to Sabre's chief executive and to WestJet CEO Gregg Saretsky, asking them to go back to the negotiating table.
The companies began talking again recently and extended the deadline to 7 a.m. MT Monday.
Cummings says he knows it’s in the best interest of both companies to come to an agreement.
“It’s definitely in our joint interests to reach a deal with Sabre. We certainly want to do so. There’s a little bit of time left — we’ll have to see what happens.”Suggest a correction