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

Posts Tagged ‘Department of Transportation’

I reread Sabre’s DOT comment on IATA’s Resolution 787, and what I really think it boils down to is them saying there is no need for a new standard because they can already do everything the airlines are asking for! Seems like they believe the world revolves around them. What about all those other aggregators, GDSs, and airline distribution partners that would benefit from having an airline connectivity standard?

According to Sabre, it appears like the only thing airlines have to do is purchase (I’m assuming they won’t give it away for free) some route-based advertising in Sabre Red’s “Graphical PromoSpot” and boom—product differentiation completed. Don’t worry airlines, you can also get a Text PromoSpot for agents still using the cryptic screen. Funny thing is, we believe airlines want more than just highlighting amenities and services. It’s about transacting dynamic, personalized, and relevant offers at time of search and throughout the travel process, like many airlines already deliver on their website.

At any rate, Sabre sums up their position well here, “That assertion [Resolution 787] is that new technical standards, to be jointly agreed and jointly controlled by airlines under the auspices of IATA, are needed because, it is claimed, GDSs, such as Sabre, will not otherwise be able to support efforts by airlines to highlight their amenities and services and to make “personalized” offers to consumers. This assertion is not true.”[1] Read the rest of this entry »

Empty_Box_Person_Looking_InOk, sometimes I am easily confused, but this one is taking the cake. I am totally confounded because in the last several months practically everyone I have spoken to—travel agencies, corporate travel managers, and even GDSs (well, Sabre and Farelogix aren’t really on speaking terms lately, so not all GDSs)—has expressed interest in having viewable, transparent, and bookable access to the various airline merchandising and ancillary services many airlines have on their websites. Everyone wants it, which makes perfect sense. Having access to more options that are relevant, up-to-the-minute, accurate, and maybe even personalized for the individual traveler making the request is clearly good for consumers, corporate travelers, corporations, travel agencies, OTAs, and GDSs. It’s good for everybody!

Enter IATA. IATA, through its standards-setting body, has developed its optional NDC initiative. This standards initiative was developed with input from various travel supply chain players. They worked long and hard to define a technology integration and workflow standard that enables an airline to deliver relevant, up-to-the-minute, accurate, and maybe even personalized offers to travel agencies, consumers, corporate travelers, corporations, OTAs, and GDSs. So, essentially IATA is enabling more airline content to be delivered and more is good, right?  Read the rest of this entry »

headscratcherIn reviewing the various motions to seal in the American Airlines v. Sabre litigation, I was amused to find that part of BTC’s motion to seal was based on the premise that “BTC’s membership pricing is a trade secret,” and that “public disclosure of the pricing of a small business such as BTC will have significant detrimental ramifications on BTC’s ability to do business in the future.” Okay, fair enough. One small problem—that information is all on their website! Not much sleuthing required. It’s on the Membership Center of their website. Kudos to BTC for being so transparent… but then, what’s the secret?

© govicinity - Fotolia.com

© govicinity – Fotolia.com

It was recently reported that the Business Travel Coalition’s We the People petition—advocating for needless government regulation of airline ancillary products—failed to garner the required signatures. The petition was just over 20,000 short of the required 25,000… not a very stellar performance. Still, we give BTC credit for attempting to raise awareness about the importance of transparency in our industry and wanted to take the opportunity to offer some feedback and even a suggested next step.

As we see it, here was the problem with the BTC petition: it was focused on a false transparency problem and ignored a real transparency problem. Let’s face it, it’s time to let go of the illogical premise that airlines are withholding ancillary information from travel agencies as part of a master plot to bilk the consumer. Not true! The real problem is that the GDSs lack the technical prowess to sell airline ancillaries in the flexible and dynamic way the airlines want to sell them while protecting their brand—just like any retailer would want. And by blocking new technology entrants in the world of distribution, the GDSs seemingly have no real incentive to improve their technologies in a way that would solve these challenges and allow for the sale of ancillary products in the personalized, dynamic way sought by airlines and consumers. Read the rest of this entry »

Great article exposing ulterior motives behind the Open Allies lobbying effort and the overall DOT fight. It is refreshing to see some bold reporting in the travel space!

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Virtually everyone agrees that travelers need to be able to compare the true cost of airfares, plus baggage fees and seat selections, in a transparent manner without getting gouged along the way with hidden extras.

Open Allies for Airfare Transparency, a coalition of industry associations, corporations and travel agencies, advocates that the Department of Transportation step in to ensure that airlines distribute all of their seat and bag-fee information through the GDSs. Open Allies is making much of a Harris Interactive 2012 traveler experiences survey that found that 94% of the 2,310 adults queried who booked summer travel using an online travel agency endorsed the notion that “all airline fee information should be available to travel agents and online travel websites.”

The online survey, conducted September 4 to 6 by Harris Interactive, was commissioned by a founding member of Open Allies, the Interactive Travel Services Association, whose members include global distribution systems such as Sabre, Travelport, and Amadeus, and their OTA clients, including Expedia, Orbitz Worldwide, Priceline, and Travelocity.

Lots of allies doing the GDSs’ bidding

Founded in early 2011, Open Allies, too, despite its roster of nearly 400 trade associations, travel agencies and corporations, has been spearheaded by the GDSs, the American Society of Travel Agents, and the Business Travel Coalition, all of which have collaborated before on similar lobbying efforts. The stakeholders’ primary interest is making sure that the current methods of airline ticket distribution remain the same and that airlines do not sell direct to consumers — even if that lowers prices for consumers.

Read the rest of the post at skift.com.

Last week, The Travel Business section of The Economist posted an article that looks at the distribution landscape of the airline industry. We think the article is fantastic and definitely worth a read!

 

AIRLINES are wonderful generators of profit—for everyone except themselves. Even in good times their margins are as thin as a boarding pass, and in recent years they have more often lost money (see chart). Averaged over the past four decades, the net profit margin of the world’s airlines, taken together, has been a measly 0.1%. By contrast, other bits of the travel business that depend on the airlines—such as aircraft-makers, travel agents, airports, caterers and maintenance firms—have done very nicely.

Read the rest of the article.

Earlier this month, I had the privilege of attending and presenting at the Department of Transportation’s Advisory Committee on Aviation Consumer Protection hearing. The objective of the day was for a hard-working advisory panel to get input from a variety of industry folks on whether or not to recommend some form of new regulation concerning the sale and distribution of airline ancillary products and services as it pertains to travel agencies—both traditional brick and mortar travel agencies as well as online travel agencies such as Expedia, Orbitz, Priceline, and Travelocity. The lines were clearly drawn between those advocating a free market approach where innovative and competitive distribution technology solutions empower full consumer transparency, choice, and personalization versus a government-regulated approach that could easily end up dictating both technology requirements and a commercial model clearly favoring the status quo. I am sure you can guess which side I came out on….

© Texelart – Fotolia.com

What I found most interesting was a presentation by Sabre where they proclaimed to the panel that they have solved the problem of offering and selling airline ancillary services (or “fees” as they like to call them) through the Sabre travel agencies. They exclaimed, “The shelves are built!” They went on to say that all Sabre needed to “fill the shelves” of their travel agency selling software was for DOT to adopt a new regulation that would force the airlines to give them all of their ancillary data, in a format that matches up with the way Sabre chose to build their selling system. That’s right: if the airlines would just agree to sell their products the way Sabre wants them to, everything would be a piece of cake. Hmmm…whatever happened to the concept of building a better mousetrap instead of telling the mouse to just stand there while you trap it?

Anyway, back to that piece of cake. After measuring, mixing, and baking, Sabre was ready to pull that piece of cake out of the oven and put the icing on with a product demonstration. They initially positioned the demo to the panel as “here and ready for agency use.” Many of us in the audience had seen this presentation before, on YouTube and GBTA-sponsored webinars. Read the rest of this entry »

The Department of Transportation is delaying any decision to force airlines to utilize the GDS-mandated methodology for selling and displaying ancillary services. They are delaying their decision because they “lack additional information about costs, benefits and consequences” of requiring carriers to provide that information to the GDSs. It’s easy to understand why DOT has more questions than answers. We can just look at some of the recent comments by industry brass. Airlines now support a standardized XML for their direct connect whereby the airline can, in a fully transparent way, offer its best and most relevant product. What is standing in the way of the GDS simply connecting to those airlines? The GDS clearly express it is not a technology or “XML” issue, as recently stated by a Sabre official in The Beat. Read the rest of this entry »

GDSs and their coalitions worked so hard building the story to tell the world how airlines are deceiving consumers with hidden fees, and that airline direct connect will create a huge lack of transparency. Well, turns out the ones really biasing information and avoiding transparency may be, according to the DOT, the GDSs and some OTAs themselves. Ask the Question!