Until now, Thai's domestic tickets have been distributed by several global distribution systems, and agents have been able choose among them. Now, THAI has decided to limit distribution to one company, Amadeus (Thailand), in which the national carrier holds a major stake.

Galileo has bitterly attacked the move, saying it was against the spirit of Thailand's open-market business environment and a step backwards for the Thai travel industry.

THAI's board of directors, following an in-depth review, decided to terminate the agreement with Galileo after discovering the airline's ticketing costs had doubled since it was put in place. THAI signed on with Galileo on June 1, 2005, in a bid to expand its market base. Using the Galileo system, travel agents were able to issue domestic tickets directly.

But in a letter dated August 23, THAI stated it would cease doing business with Galileo.

Claiming to speak in support of protesting travel agents in Thailand, Simon Nowroz, managing director of Galileo's Travelport Asia, said the move was not in the best interests of the Thai market.

"Galileo believes agents are concerned that Thai Airways' long-term strategy of distributing its domestic content through a single GDS [global distribution system] could lead to increased costs," Nowroz said.

THAI has had a strategic partnership with its Amadeus (Thailand) unit for 15 years, and in 2003, at the end of a two-year bidding process, THAI renewed its partnership with the company for a further 10 years.

Amadeus, not surprisingly, said it unequivocally supported THAI's right to implement the change, which it said was in the best interests of the airline. Amadeus is making preparations to ensure travel agents are fully supported during this transitional period.

Galileo can still distribute tickets for THAI's international flights.

Nowroz said that over the past 10 years, Galileo International had distributed THAI tickets through travel agents round the world.

He said the domestic ticketing agreement between THAI and Galileo was built on this long relationship.

He also said the domestic ticketing agreement with Galileo gave THAI an opportunity to distribute its domestic flights to more agents within Thailand, adding that for the agents, being able to sell tickets for domestic Thai Airways flights through Galileo offered them a greater choice, distribution alternatives and other benefits.

THAI broke the news in a September 30 circular sent to travel agents.

Rangsiman Mokkhasmit, THAI's Thailand director, said the letter was issued following a policy decision at the head office.

While not providing details, he suggested the decision could be related to higher booking fees under Galileo.

An executive from a wholesale tour company said that apart from changing the bank-guarantee details, the switch would not affect travel agents' businesses. He said it was the national carrier's prerogative to decide which system to use.