2011 Articles
11 April 2011
Airline distribution model 'broken'
Tom Ballantyne, Orient Aviation
The present day airline distribution system, according to Jim Davidson, president of Miami-based Farelogix, which sells direct connection distribution technology, is dysfunctional.
"I don't care whether it's an airline website, a travel agency or corporate booking tool ... the model is void of value and is broken," he told delegates at an airline distribution conference organized by U.S.-based corporate credit card major, Universal Air Travel Plan (UATP).
"We are not keeping up with the rest of retail and consumer marketing when you look at distribution. We froze ourselves about 10 years ago when the internet came upon us."
In his keynote address to the conference, held in Hong Kong in March, Davidson was pulling no punches. Airlines, he said, were spending hundreds of millions of dollars on their websites to enhance the experience of their customers yet on average 50% or more of airline tickets were generated outside the their control.
"In this part of the world [Asia] and Europe it is sometimes 70% of tickets are generated outside your control. That does not seem correct. They are generated through travel agencies, corporate booking tools or online travel agencies (OTAs).
The problem, according to Davidson is that GDSs – such as Amadeus, Sabre, Travelport and Galileo – do not have interoperability.
"In other words, they don't talk to each other easily. So if you're an airline or a large travel agency and you want to connect to those GDSs, you have to do that four times because they are each closed systems built on technology that made sense at the time ... but which has now become a costly burden, not only for the GDS, but for the airlines, the travel agents and the market place," he said.
Davidson added that integration was the key. "It is probably one of the easiest and most overlooked elements of our distribution process. We all tend to think that closed systems are the way we keep customers, but honestly that thinking died about 30 years ago and we don't know it yet.
"We have to wake up because closed systems do not work when you talk about integrating a travel experience [for a passenger] from the time they think about having to plan a trip to the time they get home."
To continue reading the article, Click Here.
