Questioning the travel industry status quo, one blog post at a time

Posts Tagged ‘American Airlines’

It’s beeOptical fibern a long time coming, but it’s incredibly rewarding to finally see NDC connectivity to the Sabre GDS enabling airline product differentiation, personalization, and improved profitability.

If you missed the news, I’ll recap it for you. American Airlines recently announced its GDS integration to Sabre using the airlines’ NDC-style API. It’s no secret that Farelogix built and powers the AA direct connect API, and that we are incredibly proud of the work that has been done with the airline to date. Connecting a full-service airline’s API to a GDS is no easy feat – at least doing it the first time – but all three companies (Sabre, AA, and Farelogix) worked hard and cooperatively to make this happen. But, believe it or not, that’s not the real story here.

The real story is what this connectivity to Sabre means for an industry that has basically been “stuck” in third party distribution limbo for years. This announcement just changed the status quo for everyone, and it’s a win-win situation for all. No one loses.

Airlines win by being able to offer differentiated content, which can increase loyalty and generate new revenue. The TMCs/OTAs win by having the most up-to-date and relevant airline content, helping to secure their value proposition to their customers. The GDSs win by being able to deliver (and ultimately display and sell) new airline services to their users (i.e., airlines, TMCs, and corporate booking tools). Consumers and corporate travelers win by getting access to the airline content and product choices they have been clamoring for, with minimal process change.

Given our history with Sabre, I was skeptical about ever seeing this level of win-win situation in airline distribution in my lifetime. But there it is, staring us right in the face. And although there is still much more work that has to be done to bring the entire industry in line with NDC, for once we are all moving forward in the right direction. New airline connectivity to GDSs is here, and it is reloading the value proposition for what was always viewed as a tired, outdated, and over-priced distribution channel. Plus, any future GDS integrations with our other airline customers will be almost automatic since 90 percent of the integration work is reusable with any GDS, thanks to an NDC-aligned integration standard.

How great is that? And in my lifetime too!

Farelogix’ Senior Vice President and General Counsel, Edna Lopez, recently had an article published in ABA Transportation Committee Quarterly. We have republished the article below. You can learn more about the ABA’s Transportation Committee here.

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Fighting Against Market ‘Disruption’

I spent all day trying to figure out how to take American [Airlines] down.1 This one statement captures the very heart of the struggle by Sabre to maintain control of the airline ticket distribution industry and is just one of many excerpts from internal company emails that came to light during the antitrust trial brought by American Airlines against Sabre in October 2012.2 A key factor that elicited such a strong comment was apparently Sabre’s view that AA [American] remains the one disruptive force in the [ticket distribution] industry”3 and that this ‘disruption’ was rooted in American’s desire to utilize alternative ticket distribution technology.4

Although the trial lasted only five days before the parties settled, the details that emerged in testimony and other documents shed an unprecedented, some would say shocking, light into the internal strategies and tactics of some of the most powerful companies in the airline ticket distribution industry. At the very least, the testimony and documents demonstrate an awareness of the dawning of a new age in distribution, a fear of what that new age might bring to those in power, and a desire to maintain the status quo—at all costs—for as long as possible.5 Read the rest of this entry »

© Liaurinko - Fotolia.com

© Liaurinko – Fotolia.com

I found it quite interesting last week when a number of parties showed up in a Tarrant County courthouse to defend their motions to seal the documents from the recent American Airlines v. Sabre litigation. It’s not the process I found so interesting as motions to seal documents are not all that uncommon. What I found most interesting was that certain companies that filed motions to seal documents are the very same companies clamoring for more transparency and visibility when it comes to the airline industry. Oh, how important transparency is! But not here! Not this time! No way, no how!

In reading a few of the actual motions filed (they are public), the general theme was that trade secrets were at stake for the companies that submitted documents. They could not have confidential information revealed as it may cause a competitive disadvantage for them. I actually agree with that premise, but only if the information being protected is… well let’s just say… on the up-and-up. I definitely do not think we should be protecting things like the secret biasing of airline content to travel agencies and consumers, or participating in an illegal boycott, or threatening customers into not using a competitive product… you know, Sherman Act kind of stuff. We should know all about things like that. You would think that if consumers were negatively impacted, and they were, some of those consumer groups would be demanding to know what went on.  Nope.   Surely trade secret information could have been kept confidential while the rest of the furtive information was disclosed? But, alas, that’s not that case.

This whole episode has led me to coin a new phrase: Transpocrisy [trans-pok-ruh-see] – the false claim to or pretense of having admirable principles, beliefs, or feelings as relates to transparency, especially in airline distribution.

Just rolls off the tongue, doesn’t it? Transpocrisy…

© antonbrand - Fotolia.com

© antonbrand – Fotolia.com

Jay, I found your recent commentary on AA’s Direct Connect initiative quite interesting. Frankly, I was hoping that it would have taken much longer before anyone found out that of the various Farelogix teams, the one working on the AA Direct Connect project is actually made up of zombies.

Although I am tempted to spend some time correcting the record on the parts of my quotes that were left out or taken out of context, I recognize that the piece was based on opinion, and not actual reporting. That said, I was surprised that you left out commentary on some very relevant issues, but maybe additional commentary from you is forthcoming. With that in mind, I wanted to offer the following possible topics for your consideration:

Perhaps in a future piece you could share your thoughts on why when our industry is clamoring for transparency (transparency purported to be available through the GDS, mind you), Sabre—a distribution intermediary with a large US market share that is trusted and paid by American Airlines and other airlines to distribute their product—was able to secretly bias travel agency displays against American Airlines in retaliation for its Direct Connect initiative. It would be great to hear your views on the state of our industry’s competitive landscape when it seems that some travel agencies were coerced to participate in this secret, Sabre-led boycott of American Airlines—a boycott that was detrimental to American Airlines, its corporate and leisure consumers, and its airline partners. According to alleged internal Sabre emails and documents, this boycott was specifically designed to punish American Airlines for its Direct Connect initiative. Maybe some Sabre executive will grant you an open interview on these topics… or at least respond to email questions.  Read the rest of this entry »

© ysk_hrsw_i - Fotolia.com

© ysk_hrsw_i – Fotolia.com

Well here we are in a new year and still no outrage! We reported over a month ago that, according to transcripts from the AA v. Sabre case, Sabre, through boycotts and biasing, might have seriously impacted those all along the travel supply chain.

According to the documents, airline partners of AA were allegedly subject to biasing. Consumers were allegedly denied transparent and unbiased flight information. Corporations with contractual obligations to American had, it appears in some cases, AA flights withheld completely from corporate travelers seeking to book. And let’s not forget that the transcripts suggest travel agencies unknowingly had their point-of-sale displays tampered with.

Are we the only ones who find it odd that such serious GDS actions—actions that apparently impacted parties across the entire supply chain—are not being met with outrage and demand for serious investigation by industry advocacy groups such as BTC, ITSA, GBTA and ACTE?

Or is our industry outrage really that selective…?

Somebody should Ask The Question.

American Airlines’ new fare bundles reflect the growing popularity of airlines competing for consumers’ business through more personalized and unique airline product offers. We consumers just love choice, so this is a welcome change from the one-size-fits-all, commoditized airline product based solely on fares and schedules. Consumers can now pick the product that best suits their needs for a particular trip. Nice, huh!

Okay, now for the nuts and bolts. American Airlines now displays its new products on AA.com and through its Direct Connect. They also state that it has made the bundles available to the GDSs. So far, so good. Both Sabre and Travelport say they now can display, sell, and ticket Americans’ new bundled products. Again, all good.

So let’s just see. No seriously, let’s see it! Lately we are all so focused on transparency, full disclosure, and no secrets. Okay, some in the industry like secrets—secret projects[1], secret boycotts[2], secret meetings[3]. But I say, no secrets! Let’s see how the selling of these bundles actually works in the Indirect Channel. So, we’ll show you ours—right here, right now. Here it is. Screenshots are below. Don’t like pictures? Check out our YouTube video of a fully transparent booking of American’s product bundles.

Okay, now let’s see yours…

SPRK1

SPRK2


[1] October 24th p35 lines 16-26 and p36 lines 1-11

[2] October 24th p 28 lines 1-2

[3] October 24th p49 lines 20-25 and p50 lines 1-17

 

Hey there, industry advocacy groups, corporate travel managers, and defenders of consumer rights, it’s been over a month since the AA-Sabre case settled. You’ve had plenty of time to read at least some of those trial transcripts. We certainly have, and we are among those in the industry wondering… where’s the outrage? Where’s the transparency battle cry? As we pointed out in a recent blog, there are plenty of things to be upset about and far heavier issues than false debate about “hidden” ancillary fees that still fly around in the press. The complete lack of attention to the meat of this case by those very groups charged with protecting consumers and corporations would almost make one question whether some of those advocates are really interested in protecting the consumer.

Back to the facts of the case: sworn testimony by Sabre employees suggests that Sabre was well aware that the alleged boycott and display biasing activities was having, or could have, an impact on far more people than its target, American Airlines. The list of those impacted include:

–      Airline partners (American interline airlines, American codeshare airlines, and oneworld alliance airlines) impacted and subject to biasing.

–      Consumers that were denied transparent and unbiased access to flight information.

–      Corporations with contractual obligations for preferred carriers such as AA, impacted at the corporate booking tool and agency level (in some cases AA flights didn’t even show up!).

–      Travel agencies that, in some cases, were unaware that their own selling displays and corresponding carrier sales volumes were being tampered with.

But don’t take our word for it. Read for yourself: Read the rest of this entry »

I could not help but think of this famous Mark Twain quote as I read Mark Pestronk’s article published in the recent issue of Travel Weekly. I’ve known Mark since my days with System One, but  I was a bit surprised by his statement about Direct Connect being “a failure” and his related references to it being “vaporware.” Now, I can only assume that Mr. Pestronk is not referring to the Direct Connect developed by Farelogix. Because our Direct Connect is fully certified by ARC and BSP in over 60 countries, deployed by 15 airlines around the world, accessed by over 5000 travel agencies in 40 countries, and used by millions of passengers (knowingly or not) to fly on those airlines. And I certainly believe these numbers would be significantly higher were it not for the concerted efforts of a few in our industry to stall the progress of the Farelogix Direct Connect.

It certainly is no longer any secret that at least one GDS has wanted to stop Farelogix and its Direct Connect deployment. Quoting testimony from the recent American Airlines v. Sabre case (transcripts available at http://www.farelogix.com/transcripts.php), just as Mr. Pestronk did, we now know this GDS wanted Farelogix to go away. As stated in internal emails from Sabre,“Our goal is one—not let Farelogix spread any further, and number two, to discontinue the current locations.”[1] Another read, “We want to make sure we are still pushing on the strategy of shutting down Farelogix.”[2]

 

© iQoncept – Fotolia.com

 I have to ask, why would one GDS go to the lengths of “shutting down Farelogix” if Direct Connect is, as reported in Travel Weekly, “a failure” and “vaporware?”

Since I can’t answer the particular question as to what would motivate a GDS to want to shut down Farelogix, what I can do is propose an offer to Mr. Pestronk, or anyone else that writes about or wants to write about Direct Connect, to come to our office in Miami for a couple of hours where we will provide a fully transparent and in-depth review of the Farelogix Direct Connect. That way the next time anyone writes about Direct Connect, he or she can reliably report on the facts.

 



[1] October 24th p41, lines 18-21

[2] October 24th p41, lines 24-25

© Pixel Embargo – Fotolia.com

While those among us in the industry may have plenty of disagreements, there certainly seems to be one thing we all agree is important: Transparency!

Read any industry article of late and chances are you’ll see a tremendous emphasis on Transparency from travel agencies, GDSs, airlines and other suppliers, ATPCo, ASTA, ACTE, GBTA, BTC, Open Allies for Airfare Transparency, ARTA, ETTSA, ITSA, IATA, ARC, the Department of Transportation, many others who support it, favor it, and even demand it.

What do we want? Transparency! When do we want it? Now! Transparency is essential. And hey, it looks like we finally have something we can all agree on. Or have we…?

Read the rest of this entry »

As more and more details emerge from the American Airlines v. Sabre trial, it is clear that Sabre made a concerted effort to neutralize AA’s Direct Connect strategy and the technology behind it. In case you need a refresher, Direct Connect is a technology that allows airlines to sell their products and services in a personalized and dynamic way to the indirect channel via a connection through a GDS (e.g., Travelport and Air Canada) or bypassing the GDS.

To Sabre’s credit, it appears from the court documents that they knew the industry was moving in this direction as far back as 2006. However, as it was deemed a threat to Sabre’s business model[1], a plan was put in place to make things so untenable for American that they would decide to drop the strategy.

According to the transcripts, in 2006, investors in Sabre had a plan, named Project Sovereign, to sell or go public with the company within the next five years[2]. But, doing so anticipated that potential competitors be “unlikely to be as viable next time around” and this meant doing “one thing: Delay or destroy American’s Direct Connect.”[3] How did Sabre plan to do this? Among other tactics—a secret boycott[4]. Read the rest of this entry »