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Two top airline reservations systems to be merged

THE BALTIMORE SUN

NEW YORK -- Two leading airline computer reservation systems will be merged into what would be the first global system outside the control of a major airline, several airline executives said yesterday.

The merger of Apollo, controlled by United, and Galileo, formed by a group of major European carriers, is expected to be announced in Amsterdam tomorrow by John C. Pope, chairman of Covia, the United affiliate that owns the Apollo system, the executives said.

One of the executives, all of whom spoke on condition of anonymity, said United would not have a majority interest in the merged system, as it now has in Covia, one of the leading systems in the United States.

"This will create the first global and neutral system," the executive said.

Until now, large systems have been controlled by major airlines. American Airlines controls Sabre, Apollo's primary competitor.

Carriers that control such systems often have benefited as travel agents, who use the system to make reservations and search out the best fares, often booked flights on the parent carriers, partly because their flights were more prominently displayed. But much of the bias in listing flights has been eliminated in recent years.

Another factor is that the airlines often provide incentives such as higher commissions and other perquisites to an agency if it books a certain number of passengers on an airline in a month.

Making the system more neutral could benefit the consumer, since travel agents would have an easier time searching out the best fares and the availability of seats.

The merged Apollo-Galileo system would basically be run out of Denver, where Apollo is now based, the executives said.

The merger also could put pressure on American Airlines to form a union with Amadeus, the other major reservation system set up by European carriers.

Galileo was formed in 1987 by nine European carriers -- British Airways, KLM Royal Dutch Airlines, Alitalia, Swissair, Austrian Airlines, Olympic, Sabena, Air Portugal and Aer Lingus.

Covia, with operations based in Chicago, is controlled by United, but its shareholders include British Airways, Alitalia, Swissair and KLM, which bought an interest for $500 million.

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