2010 Articles
6 May 2010
SeaMountain, by Michael Smith
UATP Airline Distribution Conference - Highlights
Rio conjures up many images. From the Statue of Christ to sunny Copacabana beach, people certainly have a strong impression of the city. Unfortunately, the Statue of Christ is closed and it was raining heavily during the conference so many of the delegates might have left the UATP Distribution conference with a slightly different impression!
However, they will have left the event armed with considerable more insights than when they stared. David Peller, from ITA Software when commenting on a networking event said that the best speakers shared at least one piece of information that you wouldn't find on the net. And, the UATP Distribution Conference did not fail on that front with numerous speakers and panellists sharing these types of insights.
Chris Vukelich from ENett was at his best in getting to the heart of the issue. His comments about "Putting lipstick on a pig" became the main talking point at the event. What he was illustrating was that there is no point in tinkering around the edges of the distribution issue and that you can't look at it in isolation. Distribution and payments are interlinked. The debate he opened up about both distribution and payment costs being controllable and not something you leave to the dusty old boys and girls in the back room was central to the whole conference.
What he also showed was how to be an excellent panellist. From talking with numerous of the delegates the whole event was well received as was the quality of the contributions from many of the speakers/panellists. Where Vukelich excels is to get to the heart of the issue and he clearly demonstrates he knows his subject. I don't think he mentioned in any of his replies what ENett where doing in this area (although from my separate conversations with him they are doing some pretty cool things) and that, in my mind, establishes him as a true expert.
As the conference was taking place in Rio we were all treated to a number of insightful presentations about the region and its airlines. Both GOL and Pluna shared their insights in how they have succeed in the region. They reinforced what ALTA was also saying - that the region has huge opportunities, but also has higher costs and numerous challenges to overcome. It was refreshing to hear from ALTA about these challenges - from government tax and levies (who knew that countries like Brazil who are broadly self sufficient in oil charge airlines more than the market rate for fuel!!) to lack of infrastructure also posing obstacles in the way to profitable growth. However, it was not all doom and gloom on that front as ALTA appear to be working hard to get the governments in the region to open up.
Now, no airline distribution conference that has already touched on the higher costs in the region would be complete without a discussion of GDS's costs. Radixx, Sabre, Amadeus and Travelport were all well represented at the conference and putting forward how they can work with their customers to improve distribution. For my mind, the "new" entrant (I say new because they were in the region, left and are now back in force) of Travelport in the form of Julio Bruno Castellanos put forward an interesting case. Basically, that being new they are keener and more price aware than others.
Sabre very kindly sponsored the evening entertainment where delegates were treated to a traditional Brazilian meal. For those of you not familiar with this, churrasco is essentially a massive "meat feast" (although the vegetarians sitting next to me seemed to be enjoying it as well!) where a vast variety of different meats are brought to your table and served to you. Like many of my fellow delegates I think I ate as much meat in one evening as I normally do in a month!
It really got me thinking though about the concept of "all you can eat". I've got a bundle like that for my broadband and phone at home. I have it on my cell/mobile - including internet (although not on roaming!) I even have Boingo which lets me eat all I can on a wide range of wifi hotspots around the world with access to some 100,000 in total. If "all you can eat" works in these markets I wonder when or if it will arrive for the GDS's?
The conference also talked at length on ancillary revenue. In my days at BA where I tried very hard to get them interested in ancillary revenue things have now moved on dramatically. The talk is no longer about doing ancillary revenue on direct distribution (broadly that is a given) but how to be able to distribute via indirect channels/GDS's. This is a major change, and also a major challenge. There was numerous talk of "standards" but also a desire from many of the airlines to "just do it" and to hell with the standards as by the time they get delivered the world will have moved on.
There were hints at AA Direct Connect and the work that they are also doing with HP and if this was the future. Few people were willing to say anything in the public side of the conference but in conversations with the airline delegates they were all willing AA on. There seemed to be a feeling of letting them lead the way and if they succeeded to have plans to follow quickly. But they weren't about to join them and would be waiting in the wings to potentially pick up business is the whole Direct Connect goes pear shaped.
It was a great conference and this high level summary perhaps shows you why the phrase "lipstick on a pig" struck such resonance with the delegates. Latin America is a growth market, but it isn't one country and there are numerous challenges. Distribution and payments continue to be a major part of these challenges and both suppliers (GDS's and payment companies like UATP) and airlines are rising to this. Certainly, the image of Rio that will stick with me (and the views from Sugar Loaf were truly spectacular - and it was open!) is of that poor pig and it's lipstick......although, tell me, how would you put lipstick on a pig? Maybe we will find out at Airline Distribution in 2011!
