After three months of trying to sell shares in their new joint reservations system, American Airlines and Delta Airlines have agreed to cut the price by 25 percent on the first segment of the partnership in a move to help speed federal approval.
"We are serious about bringing other partners into this partnership," said John Hotard, a spokesman for American's SABRE system. "So for the first 20 percent, we will sell it at $15 million a percentage point."Delta paid American $650 million in February to join up with SABRE, the nation's largest reservations system, in a 50-50 partnership. The airlines said then that they each would sell up to half of their interest.
At the time, the companies put a $20 million price tag on each percentage point. In other words, it would have cost $400 million to buy 20 percent of the partnership - 10 percent each from American and Delta.
That amount would now cost $300 million.
The as yet unnamed partnership is being reviewed by the Federal Trade Commission, which is studying whether it restricts trade. SABRE is the nation's largest airline reservation system with about 38 percent of the market; Delta's DATASII system is one of the smallest at about 6 percent market share.
Hotard said the price was reduced to show the airlines are serious about bringing in other partners.
"We have had some serious airlines, both domestic and international, come and talk to us and look at the deal," Hotard said.
"As we said in our original announcement, we want to bring others into the venture as quickly as possible," American Chairman Robert Crandall said. "We have formed this partnership in good faith, and we are serious about building the partnership into a worldwide computer reservations system."
Delta Chairman Ron Allen, in a joint statement with Crandall, said, "We are also interested in the participation of non-airline related firms such as hotel and car rental companies."