If you like soap operas, you’ll love watching the battles between the major U.S. airlines and their creations, the GDSs. “It’s the house the airlines built,” says Bob Offutt, senior technology analyst with PhoCusWright. And in the past six months, what was already a contentious relationship has become a litigious one with three lawsuits involving airlines and GDSs. Basically, if the airlines and the GDSs were families, you wouldn’t want to spend Thanksgiving with them – unless you had a large bottle of Jim Beam to get you through the meal.
As is often the case in battling families, it’s a fight about money. In this instance, it’s a wrestling match over who is going to pay the cost of distribution as the airline distribution model evolves. American Airlines singlehandedly had been waging a battle for direct connections, which it says would save it money and let it do much more targeted marketing to its customers. It looked like a lonely battle, however, mainly because travel management companies (TMCs) stood united against it. Continue reading
GDS Content Wars Redux
TravelPulse (formerly ModernAgent.com)
The agreements that ended the content wars between the airlines and the GDSs two years ago changed the paradigm of GDS pricing, shifting some of those costs from airlines to travel agents in return for full content. Those agreements will begin expiring in three years and the GDSs and airlines are already sparring over the direction distribution, content and pricing will take.
The two sides went head to head yesterday in a panel at the Retail Leadership Summit, part of THETRADESHOW being held in Orlando this week. One thing was clear: airlines operate in a business environment so dire and volatile that they cannot afford to wait for the GDSs to catch up to their changing strategies. Airlines are introducing attribute pricing — a model that varies from airline to airline but essentially means consumers can add on or take away certain amenities or benefits such as choosing your own seat in advance.
With a few exceptions, the only place a consumer or a travel agent can book attribute pricing is online, although the GDS are unquestionably catching up. Sabre, for example, has its Air Merchandising Suite, which has enabled launch customer Midwest Airlines to let travel agents book its premium Signature seats over its Saver seats in the GDS. Similarly, Travelport Agencia enables Galileo-connected Canadian travel agents to access and book the full range of Air Canada’s a la carte fare products and attributes, including Flight Passes. Still, there is much to be done in this area — just look at the fact that the only time travelers can pay for the baggage fees that airlines continue to introduce is at check-in. Continue reading