Episode 007 — "Who Owns the Offer? Sabre Cries Monopoly as the Agents Show Up"

Eric Marketts

Last week we closed with two specific instructions. Watch Rio — the IATA AGM, running June 6 to 8 — for any signal the industry is addressing the agent question directly. And watch whether Sabre's monopoly claim gets a regulatory hearing or quietly becomes a negotiating posture. We said next week we'd know which was signal and which was noise .

Steph Nell

This week the answer is: both are signal. Just not in the way Sabre intended.

Eric Marketts

Welcome back to The V1 Airline Retailing Report and today is Monday, June 8th. I'm Eric Marketts.

Steph Nell

I'm Steph Nell. Three narratives today and they share a floor plan. The PSS-and-offer-engine layer. The MCP agent interface forming above it. And the IATA program tying it all together in Rio. Three floors of the same building. And the question running through all of them is the same one: airlines spent a decade fighting to own their offer. Who's standing between them and the buyer right now?

Eric Marketts

Let's build it from the ground up .

Eric Marketts

We've covered the Sabre-Amadeus dispute twice — first in Episode 4, when Sabre CEO Kurt Ekert named Amadeus's Altéa lock-in on an earnings call, and again in Episode 6, when we showed how every new Nevio confirmation made the legal argument harder to sustain. This week the question isn't whether Sabre is right about the dynamic. It's what naming it actually reveals about where the real chokepoint is .

Steph Nell

Because Sabre is right about the dynamic. Walk through what that means precisely.

Eric Marketts

For twenty years the GDS was the gatekeeper between the airline and the agency. Not by natural market choice — because the GDS held the pipe. NDC was built to challenge that directly. Airlines would publish offers themselves, own the content, own the pricing logic. They won that argument. The standard exists. The pipes are being built.

Steph Nell

And in the Offer and Order world the offer engine bolted onto the PSS becomes the new gatekeeper. Not the distribution pipe — the operational system the airline runs on. Whoever built that system controls what transitions the airline can afford and what it can't.

Eric Marketts

The bull case for Sabre's legal move is real. If a competition authority — the EU is the credible venue — forces API interoperability at the PSS layer, it opens the O&O technology market in a way the market hasn't achieved commercially. Airlines that today have no practical path to Sabre's OSD or Accelya's FLX get a genuine option. Market competition drives better products and lower costs. The 73% of airlines that haven't started O&O transformation get a less obstructed path .

Steph Nell

The bear case is sequencing and evidence. Amadeus has processed 40 million Nevio bookings. Air France-KLM, British Airways, and Saudia have confirmed Nevio publicly. Regulators build antitrust cases around coercion and foreclosure. Voluntary confirmations are the opposite of that evidence base. EU investigations run two to four years, during which Amadeus keeps converting Altéa carriers and deepening switching costs every quarter .

Eric Marketts

Here's the critical take — and it's not about either company specifically. The PSS has become the modern distribution chokepoint the way the GDS was for thirty years. The difference is that this chokepoint is operational, not commercial. The GDS held data. The PSS runs the airline. You can build a parallel pipe to bypass a data intermediary. You cannot build a parallel pipe to bypass the system that runs your check-in, your inventory, and your departure control. Every NDC and O&O discussion that treats distribution as the variable and the PSS as the constant is looking at the wrong layer. The PSS is the constant. It always has been .

Steph Nell

Second narrative. And this one connects to something Sabre actually built — not the lawsuit. The Sabre-Mindtrip-PayPal agentic booking pipeline we covered in Episode 5 wasn't just a proof of concept. It was the first implementation of a pattern the industry is now building toward systematically. This week that pattern has a name and a standard: Model Context Protocol .

Eric Marketts

MCP. The AI-to-data interface that the tech industry has largely converged on as the way AI agents connect to external systems. It landed in airline distribution in two meaningful ways this week. TPConnects added MCP layers to its Iris and Astra platforms — exposing more than 60 airlines through a single machine-readable interface and normalizing NDC schema fragmentation for AI agents. Sabre, PayPal, and MindTrip separately announced what they're calling the industry's first end-to-end agentic booking pipeline targeting Q2 2026. The shared pitch: if your content is not machine-readable to an agent, you are invisible in agent-led shopping .

Steph Nell

The bull case is that MCP solves the problem NDC created. Airlines built NDC to own the offer — but every carrier implemented the standard differently. Different schema structures. Different ancillary representations. An AI agent querying 60 airlines through 60 NDC implementations is not practical at scale. A normalization layer hands agents one clean interface. If agents become the dominant shopping front end — and IDC's 30% by 2030 projection says they're heading there — airlines reach travelers without paying for a new intermediary at the search layer .

Eric Marketts

And the bear case is that an MCP normalization layer over 60 airlines is still an aggregator. TPConnects sits between the airline and the agent. Whoever controls that normalization layer controls what the agent sees, what it prioritizes, and what schema elements it surfaces. Airlines that spent a decade pulling offer creation in-house could hand the demand interface to whoever owns the best agent connection. New intermediary. Different name. Same structural problem .

Steph Nell

What's the critical take?

Eric Marketts

Agents do not care about your brand. They do not care about your bundle design, your loyalty pitch, or your merchandising strategy. They care about a clean, fast, machine-readable offer and a price. Everything airlines built modern retailing to enable — rich content, dynamic bundles, experiential ancillaries, brand differentiation — gets compressed by an agent into a row in a comparison. The MCP layer is not just distribution plumbing. It is the moment the airline discovers whether its offer can survive being read by a machine that strips out the marketing and returns the math .

Steph Nell

Third narrative. The 82nd IATA AGM and World Air Transport Summit, June 6 to 8 in Rio, hosted by LATAM. Modern Airline Retailing on the agenda. The momentum numbers coming out of Rio are the best the program has ever produced. They're worth reading carefully .

Eric Marketts

Seven full-scope airline Offer and Order contracts in place industry-wide. Forty-eight pilots or proofs of concept. IT-provider tenders doubling year on year. Riyadh Air live on native O&O as the first full-service greenfield carrier. TMCs reporting NDC bookings up more than 150% year over year. And Qantas and the Australian Travel Management Company held a transparency forum on NDC adoption in Sydney on June 2 — notable because Qantas hasn't historically been aggressive on NDC transparency .

Steph Nell

Bull case. These numbers are not slideware. Seven full-scope contracts. Doubling tenders. A greenfield carrier on native O&O in production. Triple-digit NDC booking growth. The shift from experimentation to material volume is in the data, not just in conference announcements. Airlines that move now retire legacy distribution cost, own their offer, and merchandise dynamically — while competitors are still scoping programs.

Eric Marketts

Bear case: read the roadmap, not just the momentum. Seven full-scope contracts across an industry of 300 to 400 airlines is a thin base. Most IT providers completing current builds don't finish until 2027 or 2028 — and PSS decommissioning, the hard part, begins only after that. Triple-digit NDC growth off a small base is mathematically easy. The IATA roadmap itself quietly acknowledges the full transition runs past 2030 for most carriers. The visible momentum is tenders and pilots. Production at scale hasn't started .

Steph Nell

And the critical take ties all three narratives together. The transition runs past 2030. Which means the industry lives in hybrid — NDC plus EDIFACT plus O&O — for the rest of this decade. The PSS chokepoint from narrative one and the MCP agent layer from narrative two are both forming during that hybrid period. The winners in this transition will not be whoever reaches 100% Offer and Order first. They'll be whoever runs the messy middle most cheaply — managing three distribution stacks at once without the cost and complexity eating the retailing upside. Coexistence is not a transition problem. It's the product for the rest of the decade .

Eric Marketts

Three narratives. One question. Let me close it.

Steph Nell

The MCP layer is forming outside airline standards bodies, outside IATA's process, and outside any certification framework. It's being built by the tech industry to solve a tech-industry problem — how AI agents access structured data at scale. Airlines are not at the table where MCP architecture is being decided. That is not a hypothetical gap. It is a gap that is closing, one implementation at a time, without airline input .

Eric Marketts

And Rio gave us the honest version of the transition timeline. Real momentum. Real contracts. Real volume growth. And a roadmap that acknowledges most of the industry won't finish until the early 2030s. The urgency isn't the destination. It's the decade of coexistence ahead — and whether you're managing that cost or being managed by it.

Steph Nell

The PSS layer is the incumbent gatekeeper. The MCP layer is the emerging one. And the industry program runs through both of them at whatever speed the slowest PSS migration allows. Same building. Three floors. Built in the wrong order. If this episode landed — share it with someone in your organization who's making distribution or retailing decisions in the next 12 months. These are not 2028 questions. They're 2026 questions with 2030 answers.

Eric Marketts

We'll be back next Monday. I'm Eric Marketts. Also, if you want to dig deeper into these topics please see the episode details for specific links and news articles.

Steph Nell

I'm Steph Nell. Thanks for listening.

Eric Marketts

Stay sharp out there .