The year 2012 was marked by moves to push airline distribution in a
new direction, away from “commoditization” and toward a new model that
is not simply tied to the selling of seats.
At first glance, the settlement of American Airlines’ antitrust lawsuit against Sabre, approved by American’s bankruptcy court on Nov. 28, appears to maintain the status quo, but it frees American from a previous agreement with Sabre that limited its ability to openly market its Direct Connect product.
When Direct Connect is fully developed, American and co-developer Farelogix say the carrier will be able to provide highly personalized offers to passengers based on a number of criteria.
While they may still have many questions about the technology, travel management companies may be more inclined to evaluate Direct Connect if they are no longer at risk of being caught in the crossfire between two warring industry players.
Among
the tidbits of information revealed in the five days of the lawsuit’s
trial was that American Express Business Travel uses Farelogix’ Hawkeye
interface to connect with Air Canada’s AC2U API and that Air Canada
also had discussions with Carlson Wagonlit.
That is similar to the arrangement that American had sought with travel management companies.
A key difference between the approaches taken by the two carriers is that Air Canada continues to distribute through GDSs in the conventional way, although it does not provide Sabre or Amadeus with full content. (Travelport’s Canada-specific Agencia desktop accesses Air Canada’s full content via AC2U.)
American, on the other hand, said at the beginning of its campaign to promote direct connect that it planned to cut the Edifact cord that links most airlines to GDSs; if GDSs wanted American content, they would have to connect via XML.
It soon became clear that American would take the all-or-nothing approach with travel distributors as well when it revoked Orbitz’s right to sell American tickets when it spurned Direct Connect.
It’s impossible to say whether American’s hardline approach impaired its cause, but it’s safe to say that it did not promote peaceful coexistence with the GDS companies.
In a deposition, Graham Wareham, Air Canada’s senior director of distribution, said the carrier’s API “asks the airline on a transaction-by-transaction basis whether or not we want to sell and what is the product we want to offer to that particular passenger.”
That functionality closely resembles what IATA envisions in its New Distribution Capability (NDC): a system that would allow airlines to base their offers on the passenger’s identity, including demographics, status and history with the airline.
Once again, the distribution waters have been roiled; travel agents view the project with trepidation.
IATA Resolution 787, which created the framework for NDC, made no mention of a role for aggregation of airline content, by GDSs or otherwise, raising the question of whether comparison shopping would still be possible under the NDC regime.
IATA has sought to quell those fears, saying there is indeed an aggregator role. But the devil may be in the details.
It appears that IATA envisions that aggregators would obtain fare information directly from the airline’s “dynamic shopping engine” via XML messages, rather than from the traditional ATPCO feed.
Even if airlines opt to participate in NDC – and IATA stresses that participation is optional – it is unlikely that they would pull out of GDSs altogether.
American, despite its desire to cut the Edifact cord, made it abundantly clear in its lawsuit against Sabre that being ousted from the GDS would be fatal.
But other airlines have indicated that they would like to distribute content directly to travel management companies.
(In a sense, it is an acknowledgment that the airlines want it both ways: They want to “own” the customer, but they don’t want to service the customer. They need TMCs to do that.)
About 10 of IATA’s 240 member airlines are driving the NDC initiative, but they are large and powerful.
NDC may or may not take off, but it’s clear that the concept is not going to go away.
Airlines look at companies like Amazon, which has been in the “personalized offer” business for 18 years, and they will keep pushing for changes.
What does that mean for the future of airline distribution?
It is in nobody’s best interest to eliminate aggregation of content. It is a rare company that relies solely on the services of one carrier.
To serve their clients, TMCs need an efficient way to access information.
Given the regulatory climate in North America and Europe, anything that smacks of non-transparency in air fares is likely to meet with resistance.
Airlines may want to ditch commoditization, but a large section of the traveling public wants to see the lowest fare.
On the other hand, airlines do not want and should not have to be left behind in the 20th century while other industries all around them pursue the fine arts of retailing and merchandising, and an equally large section of the traveling public would likely appreciate and reward their efforts.
In many ways, the same GDS companies that decry “fragmentation” are the best equipped to operate parallel universes.
They have developed agency desktops that can aggregate non-GDS content from multiple sources.
They could also acquire companies that specialize in this area to add capabilities to their existing desktops.
http://www.traveltechnologyupdate.com/lead_121112.html
At first glance, the settlement of American Airlines’ antitrust lawsuit against Sabre, approved by American’s bankruptcy court on Nov. 28, appears to maintain the status quo, but it frees American from a previous agreement with Sabre that limited its ability to openly market its Direct Connect product.
When Direct Connect is fully developed, American and co-developer Farelogix say the carrier will be able to provide highly personalized offers to passengers based on a number of criteria.
While they may still have many questions about the technology, travel management companies may be more inclined to evaluate Direct Connect if they are no longer at risk of being caught in the crossfire between two warring industry players.
Among
the tidbits of information revealed in the five days of the lawsuit’s
trial was that American Express Business Travel uses Farelogix’ Hawkeye
interface to connect with Air Canada’s AC2U API and that Air Canada
also had discussions with Carlson Wagonlit.That is similar to the arrangement that American had sought with travel management companies.
A key difference between the approaches taken by the two carriers is that Air Canada continues to distribute through GDSs in the conventional way, although it does not provide Sabre or Amadeus with full content. (Travelport’s Canada-specific Agencia desktop accesses Air Canada’s full content via AC2U.)
American, on the other hand, said at the beginning of its campaign to promote direct connect that it planned to cut the Edifact cord that links most airlines to GDSs; if GDSs wanted American content, they would have to connect via XML.
It soon became clear that American would take the all-or-nothing approach with travel distributors as well when it revoked Orbitz’s right to sell American tickets when it spurned Direct Connect.
It’s impossible to say whether American’s hardline approach impaired its cause, but it’s safe to say that it did not promote peaceful coexistence with the GDS companies.
In a deposition, Graham Wareham, Air Canada’s senior director of distribution, said the carrier’s API “asks the airline on a transaction-by-transaction basis whether or not we want to sell and what is the product we want to offer to that particular passenger.”
That functionality closely resembles what IATA envisions in its New Distribution Capability (NDC): a system that would allow airlines to base their offers on the passenger’s identity, including demographics, status and history with the airline.
Once again, the distribution waters have been roiled; travel agents view the project with trepidation.
IATA Resolution 787, which created the framework for NDC, made no mention of a role for aggregation of airline content, by GDSs or otherwise, raising the question of whether comparison shopping would still be possible under the NDC regime.
IATA has sought to quell those fears, saying there is indeed an aggregator role. But the devil may be in the details.
It appears that IATA envisions that aggregators would obtain fare information directly from the airline’s “dynamic shopping engine” via XML messages, rather than from the traditional ATPCO feed.
Even if airlines opt to participate in NDC – and IATA stresses that participation is optional – it is unlikely that they would pull out of GDSs altogether.
American, despite its desire to cut the Edifact cord, made it abundantly clear in its lawsuit against Sabre that being ousted from the GDS would be fatal.
But other airlines have indicated that they would like to distribute content directly to travel management companies.
(In a sense, it is an acknowledgment that the airlines want it both ways: They want to “own” the customer, but they don’t want to service the customer. They need TMCs to do that.)
About 10 of IATA’s 240 member airlines are driving the NDC initiative, but they are large and powerful.
NDC may or may not take off, but it’s clear that the concept is not going to go away.
Airlines look at companies like Amazon, which has been in the “personalized offer” business for 18 years, and they will keep pushing for changes.
What does that mean for the future of airline distribution?
It is in nobody’s best interest to eliminate aggregation of content. It is a rare company that relies solely on the services of one carrier.
To serve their clients, TMCs need an efficient way to access information.
Given the regulatory climate in North America and Europe, anything that smacks of non-transparency in air fares is likely to meet with resistance.
Airlines may want to ditch commoditization, but a large section of the traveling public wants to see the lowest fare.
On the other hand, airlines do not want and should not have to be left behind in the 20th century while other industries all around them pursue the fine arts of retailing and merchandising, and an equally large section of the traveling public would likely appreciate and reward their efforts.
In many ways, the same GDS companies that decry “fragmentation” are the best equipped to operate parallel universes.
They have developed agency desktops that can aggregate non-GDS content from multiple sources.
They could also acquire companies that specialize in this area to add capabilities to their existing desktops.
http://www.traveltechnologyupdate.com/lead_121112.html
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