The Knowledge > Supplier perspective The lesson…
AMERICAN AIRLINES SHOULD LEARN Forcing direct connect on TMCs was not the right way to go about changing the distribution model, says Ajaya Sodha. He outlines the merits of the GDS model and a way forward for the airline
I AM delighted that American Airlines has now withdrawn their threat to penalise TMCs who use Travelport to book American Airlines flights. Of course, this is not a resolution of
Ajaya Sodha CHAIRMAN KEY TRAVEL Ajaya Sodha is Chairman of Key Travel, a TMC specialising in serving the travel needs of the global not-for-profit community. Ajaya established Key Travel in 1980, and has since grown the consult- ancy with five offices worldwide, including bases in London, Brussels and Washington DC. Ajaya holds many influential positions within the travel industry, including vice chairman of the GTMC, Chairman of the GTMC’s Air Working Party, board member of the Guild of European Business Travel Agents, and serves on the Air Passenger Joint Council of the UK.
their dispute, but a step in the right direction to negotiate a solution which will serve the interests of all those concerned. While I would not like to prescribe a solution to American Airlines, I would like them to be aware of the importance of the GDS model to travel management companies and their customers. And so any solution that they come up with should address the key issues for our mutual corporate customers. The key advantages of the current model of booking business travel via a GDS are: a) Comparison shopping: under a
“Forcing TMCs to adopt new models without understanding their onward relationships with their customers is not the way”
GDS display, data from all airlines operating between two points are displayed, allowing a transparent comparison and ensuring that the business traveller is offered a full range of options. The GDS do not currently display ancillary services data but new developments are in hand which should be able to do so, hence enabling a TMC to provide its customers with full information before making a reasoned choice. American Airlines' stated objective is to make price comparison impossible and I am unable to accept that this is in the business travellers’ interests. b) Management Information: Corporates depend on the TMC to provide management information that
enables them to enforce travel policy compliance. It is in every carrier’s interest that corporate buyers are able to influence additional bookings to them through analysis of booking data and stricter corporate travel policy compliance. c) Traveller tracking: in
an uncertain world corporates have a duty of care to their employees. TMCs provide the vital link and any change in the model should incorporate this vital process.
American’s case against GDS distribution is based around two issues, that of cost of distribution and control of their content. I am not against their desire to control costs; every business must improve its bottom line to survive. They must sit down with the GDSs and negotiate their best deal. But forcing TMCs to adopt alternative models without understanding their onward relationships with their customers is not the right way. Since I am not a 'techie', I am not
sure if direct connect can dovetail into a GDS. The GDSs do need to understand the airlines' point of view and find innovative solutions that benefit all parties. American Airlines should recognise
the added value that TMCs bring to the table for them. They should understand that business travellers tend to travel in premium classes where many of the ancillaries will be offered gratis. I can’t see an airline wishing to charge £20-£50 for a checked bag when the customer is paying several
thousand pounds to travel in their business or first class cabin. Even when a business passenger travels in economy, the booking is likely to be made at short notice, therefore ensuring a higher yield for the carrier. For many business travellers, the ancillaries are not relevant as they will probably get them free through their frequent flyer status. Control of content is a contentious issue. The spirit of the law in the UK, and possibly across Europe, is that the customer must be made aware of the entire cost of the transaction before he is forced to commit to it. Withholding content and charging additional fees after the transaction of buying the ticket will flag up additional legislation from the competition authorities. Is American Airlines prepared to be publicly reprimanded as the bad boy of the airline industry? I urge caution to American Airlines
in its quest to challenge the accepted norm. We in the travel management community are not averse to change, but we do want change for the better, not for worse.
12 I THE BUSINESS TRAVEL MAGAZINE
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