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

Posts Tagged ‘Transparency’

© 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…

© 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 »

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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 »

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.

With the recent news about the hefty losses at JPMorgan Chase, I couldn’t help but yet again think about the old adage: Be careful of what you wish for. 

In the case of JPMorgan Chase, you have the down-to-earth and straight-shooting CEO who, until a few days ago, was the de facto poster child for anti-regulation of the financial industry. He was the king of “we know how to manage risk.” Again, until a few days ago.

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Now, I am certainly not one to advocate more government regulation. I’m a free and open market guy who still believes that innovation, competition, and the occasional shine of a bright light is the best approach to free enterprise and competitive opportunity. This is why I continue to be a bit baffled by the ongoing “lack of transparency” claims against the airlines by the GDSs and their advocates. We’ve iterated and reiterated that the transparency is there with airline web sites and new distribution technologies for travel agencies. Even the Department of Transportation has existing regulations (Consumer Rule 1 and Consumer Rule 2) to ensure that consumers have the information they need for their purchases in a timely and coherent manner. But some folks, like the GDSs, just don’t seem to get it and should probably take note: The sword one swings in the quest for transparency is sharp on both sides. Read the rest of this entry »

Bobblehead (aka The Innovator) was out on a walk the other day and ran across an old friend. They talked about change in airline distribution, new websites, and, most importantly, how innovation aids transparency, consumer choice, and comparison shopping.

 

 

Or view on YouTube here.

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!

The only true deception going on is that being fostered by the GDS and their sponsored coalitions and lobbyists as they attempt to protect their anti-competitive, high-cost GDS business model. Rather than being transparent about this self-serving objective, there is a massive PR campaign designed to deceive the public into believing that direct connects will hurt the consumer and the travel agency. Come on — are you kidding me? Ask the Question!