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

Posts Tagged ‘innovation’

Finally, we put an end to 2013. It was a year of ongoing litigation, lobbying, lethargy, legacy, and three-letter acronyms (DOT, NDC, etc.) that may actually be behind us. I know that certainly is the case for Farelogix. It’s been a long time since we could call off the lawyers and lobbyists, and I can’t remember the last time I could look at my upcoming travel plans and not see regular trips to DC. Sure, I may pop by occasionally to say hi to my friends at DOT, but only when I’m in town to have dinner with Premo or attend an industry conference.

640px-Pink_knitting_in_front_of_pink_sweatshirt

And NDC was finally exposed for what it really is – a boring technology schema that allows airlines to deliver rich content to travel agencies, even through the GDSs no less (see AA, AC, WS). Seriously, we spent all of 2013 arguing over something that is actually good for everyone in our supply chain. Boy, I bet we all would like to have some of that time and money back. Oh well, at least we contributed to the economic recovery. Read the rest of this entry »

© Maridav - Fotolia.com

© Maridav – Fotolia.com

As a number of technology companies position themselves to capitalize on IATA’s NDC initiative, it is likely that some “NDC impersonators” may be lurking in the shadows, ready to pounce on unsuspecting airlines.  So, how do you know if you are dealing with an NDC impersonator? Well as Jeff Foxworthy might say, You know you’re dealing with an NDC Impersonator when they say…

“Hey, all you have to do is give us access to all of your customer loyalty data, and we will personalize the offer for you.”

– Or –

“We can build that API for you, and it will only cost you… $1 Million dollars as a down payment.”

– Or –

“You want to introduce a new kind of seat? No problem! It will only take 24 months for implementation.”

– Or –

“Don’t worry! The PSS will handle all of this… and it’s freeeeeeeee.”

– Or –

“Well, we’ll have to weigh your requirements against the community. Let’s put your idea to a vote to see if other airlines want it, too.”

And finally, you know you are dealing with an NDC Impersonator when they say…

“We coded those applications for your current solution. Of course it doesn’t work now because you changed hosting providers. It’s your fault!”

447px-Western_Union_Office_between_1913_and_1917_2I don’t know if you’ve heard, but the last large telegraph system in the world will shut down next month. While telegrams served as a very useful, important, and efficient way of communication, they are now obsolete due to the technological innovations of the past thirty years.

So let’s raise a glass to telegrams and thank them for all their hard work. They did their job, and they did it well. And while we wish telegrams well in their retirement, let’s be thankful for innovation and the technological advancements that gave us things like the Internet, email, and, dare I say, texting. I am sure there are a few folks left that want telegrams to stick around because they are comfortable with them, or they have a business model built around them.  But we can’t hold on forever.  Because isn’t sending an email such a better way to do things?

See where I’m going with this…?

Just like when we were 8 and our goldfish died, most of us will, at some point, go through the 5 Stages of Grief. It’s a tough process, but once we manage our way through it, we end up being at peace with the situation. As it turns out, my experience has shown me that for some people, accepting new innovation generally follows a similar process. While there is certainly nothing funny about grief, I thought it might be fun to view the eventual acceptance of IATA’s new NDC (New Distribution Capability), otherwise known as Resolution 787, through the 5 Stages of Accepting Innovation.

© richardlyons - Fotolia.com

© richardlyons – Fotolia.com

As we know, the first stage is Denial. Pinkie the goldfish isn’t dead. He’s just resting. Upside down. When IATA first announced its NDC initiative, it seemed that several folks in the industry, including some of the more vocal opponents of change, reacted by simply denying NDC’s existence. Even though IATA was having a number of working groups in Geneva and Montreal with folks from airlines, tech companies, TMCs, and GDS, some still suggested that whole initiative was just a bunch of vaporware. Not surprising, as many initial reactions to innovation are to simply deny its existence and hope that it goes away.

But, like most good things, innovation doesn’t just go away. So what happens next? Enter Stage 2: Anger. I’m so mad at Pinkie! How could he do this me! In the 5 Stages of Accepting Innovation, this is probably the most interesting and unpredictable stage because it brings out what I call creative criticism of the innovation. Folks accuse it of just about every bad thing under the sun, even if the facts clearly point to the opposite. One thing I have learned is that in Stage 2 of Accepting Innovation, facts mean little or nothing. Remember, we’re MAD! So it is in this stage when a lot of people—particularly those individuals, companies, and coalitions very much invested in the old way of doing things—say incredulous things like IATA’s NDC is anti-competitive and represents the end of the world as we know it! Behold the end of comparison shopping! Stay away from that NDC thing, as it will require you to give out all precious personal information and take away your right to shop anonymously! (Actually, I am a bit surprised we didn’t hear NDC called unpatriotic. That‘s always a favorite during an outpouring of anger.) Of course, anyone who has read Resolution 787 in its entirety or been involved in any of the IATA NDC working groups knows that none of the above accusations about NDC are true. But hey, folks are mad, and they get to say stuff that isn’t true. It’s the rite of passage through Stage 2. Unfortunately, some tend to wallow in this stage a bit too long. Read the rest of this entry »

TakeTravelForward recently posted an article on airline distribution and how it is time the industry shift to a consumer-centric marketplace as opposed to one where an intermediary controls the product offers to airline travelers. They also produced a series of videos on the same subject. We thought it was worth reposting on our blog in case you missed it. Enjoy!

 

Today, airlines are competing for consumers in ways never imagined just a few years ago. For decades much of the airline industry had been relegated to a commoditized offer of an available fare and schedule. In fact, the inability of airlines to differentiate their product offerings led to what many viewed as a “race to the bottom” in terms of innovation, service, and the entire experience from “buy to fly.”

But why did this happen? Did the airlines really want to give consumers a bad experience? Of course not. They simply could not maintain profitability in an era of rising fuel prices and a mass commoditization of their product.

The turmoil in the industry today reflects that the pendulum is now swinging back, as airlines strive to offer consumers new and better travel experiences that are unique to the airline. But the shift is not so easy, and there is friction across the industry. While airlines are willing to share any information necessary to deliver customized offers to travelers, friction is inevitable as airlines try to achieve these changes against a backdrop of an entrenched business model that may serve the dominant industry intermediary (the GDSs) well but has left consumers as a mere afterthought.

Today’s consumers are unique and different, and so are their trips—vacations, business trips, weddings, and more. Consumers want to be treated special, rewarded for loyalty, given options and choice, and know they’re getting the best deal.

The Internet has given us the power to search and comparison shop for the best deal, and the notion of “one-size-fits-all” has been replaced with “Real-time, Transparent and Personalized.” Consumers enjoy and expect these benefits in today’s transparent retail world, and it should be no different when they search for and purchase air travel. Now is the time for the travel distribution industry to join in.

 
Episode 1: Do You Really Know What Happens When You Shop For An Airline Ticket?

Read the rest of this entry »

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 »

You know me. I love to talk airline distribution any chance I get. The other day I was involved in a discussion about the traditional distribution model, often times referred to as the Push model. The Push model, currently employed by intermediaries like the GDSs that feed information to most travel agencies, is essentially a static model where the GDSs gather basic airline components (schedules from OAG, fares from ATPCO, and fare class availability from the airlines) and store this information in their own systems. This stored information is periodically updated from the aforementioned sources. This data then patiently waits for a travel agent to make a travel request inquiry to the GDS. The GDS (not the airline) then creates the actual airline offer for the agent on behalf of the airline, often times with little or no input from the airline until well after the sale is made.

The Push model has served the industry well in the past and made all the sense in the world at the time it was developed. However, today’s Push model is a technological byproduct of an era when electronic communications and bandwidth were expensive (pre-Internet), system-to-system connectivity was complex, temperamental, and expensive (pre-APIs and web services), and airline content was little more than a published set of schedules and fares combined with availability based on fare classes.

Read the rest of this entry »

by Nicholas E. Calio

If we have learned anything from the evolution of the smartphone, it’s that we — that is, all consumers — like to have choices. We like to pick our phone, our apps and our data plans and customize them to best meet our needs.

And we like the fact that we have multiple options when it comes to where to buy our phone and services, understanding that we benefit from competition, technology and the free market at work.

The same is true of air service.

Customers no longer make their travel decisions based solely on schedules and fares. Rather, they now can customize their experience based on what they value and need, opting for choices such as in-flight WiFi, priority boarding, premium seating, meals or doubling their miles, among other criteria.

Read the rest of the article at Travel Weekly.

Did you know travel agents are working around the GDS to meet customer demand for booking airline ancillary products and services? In fact, “nine in 10 corporate agents and more than 70% of leisure retail agents have booked air ancillaries over the past year.”

Wait. That quote can’t be right. I must have read it wrong. Due to technological limitations that restrict the meaningful display of ancillaries in the GDS, almost no airline ancillaries are available for sale through GDSs. I know because the GDSs and their allies are trying to push for government regulation to require airlines to distribute and display their ancillary products and services through the… well, let’s just say the less-than-modern GDS channel.

But no, I read this recent Travel Weekly article three times and that’s what the quote says. The article reports on a PhoCusWright study that states, among other things, “Agents’ willingness to book [ancillary products] without compensation implies that the demand for handling ancillaries as part of the flight reservation is customer-driven.” So there we have it! Despite these agencies getting no help from their GDS, they are finding ways to sell ancillaries. It’s really no surprise when you think about it. Travelers, like all consumers, want choices and options, and travel agents are once again demonstrating resilience when it comes to meeting the needs of their customers!

© shotsstudio - Fotolia.com

Read the rest of this entry »

Articles about travel agents and ancillaries have been all over the web lately. First I read this one. Then I read this. And then this. I felt like I was reading the same article over and over and over. Then it hit me — Groundhog Day.

No, I’m not talking about the day when we pull Punxsutawney Phil from his burrow in Pennsylvania to see if he’ll see his shadow or not. I’m talking about the hilarious movie Groundhog Day (yes, the movie takes place on Punxsutawney Phil’s special day). In the movie Bill Murray keeps living the same day over and over… and over. And it seems to me that the conversation surrounding travel agents and ancillaries is stuck in a similar pattern. Read the rest of this entry »