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

Posts Tagged ‘Travel Agency’

In case you missed last week, IATA’s Alexander Popovich wrote a great piece in Tnooz explaining some of the fears and angst surrounding NDC. Definitely worth the read!

**************

 

NB: This is a viewpoint by, Aleks Popovich, senior vice president for financial and distribution at the International Air Transport Association.

Providing customers with more information and choice, enabling agents to sell a wider range of products and opening up a new realm of services more closely tailored to customers’ needs.

This should be a welcome development in the travel industry.

However, IATA is well aware that many in the travel agency community are concerned about IATA’s Resolution 787, the foundation document for the New Distribution Capability (NDC) project.

Yet despite the filing of 400+ comments and motions for or against Resolution 787 with the US Department of Transportation, there has been almost no attention paid to what is really driving travel agent angst over the NDC project: fear of the unknown.

Read the rest of the article at Tnooz.

I had the privilege of presenting to the fine folks of the FBTA last week. This is not my first time with the group, and knowing they can be a little feisty at times, I came prepared to bare all. There is no holding back with this group. They remind me a lot of the group from LABTA.

My presentation was all about airline ancillary services and the impact these might have on corporate travel managers and their travelers. Whether it’s a new bundled airline product freshly negotiated by savvy travel managers or a set of company-authorized a-la-carte optional services based on trip type or duration, a whole new world has opened up for today’s corporate travel managers… if they want it that is. I bet most will, but I suspect some will run for the hills because navigating in this new world where the corporate travel managers are negotiating the travel experience is new territory. The days of simply negotiating a discount in return for volume are long gone.  And simply getting your travelers an entry-level frequent flyer status just won’t cut it.

As is typical with this group, presenters only get through their first three slides before the “Hands of Challenge” arise. No different this day, but I expected and prepared for it. In reality, this is really what I love about this group—dialogue! Ok, maybe more like pointed questions, but I love it anyway. At first they seemed very school-like by raising their hands and politely waiting their turn to ask, but that only lasted a few minutes. We talked about how airlines are working hard to create an “experience” for their travelers rather than just a trip, and how travel managers now have the ability to influence their travelers experience by engaging airlines to customize product bundles based on type of travel—say a training venue versus a sales trip halfway around the world for the top salespeople in the organization.  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 »

In my opinion, Global Distribution System (GDS) companies wield significant horizontal and vertical market power over the airline ticket market serviced by travel agencies. The GDSs have three primary customers—airlines, travel agencies, and third-party technology providers. Over time, the GDSs have intentionally crafted their relationships with their customers to build and solidify a market structure impenetrable to competition. This deliberate process was put in place as each commercial relationship came up for renewal.

The net effect of having a “tied-up marketplace” is harm to consumers. They find themselves having fewer airline product options and paying higher airline ticket prices than they otherwise would, given an open and competitive ticket distribution market. Additionally, the ticket distribution market suffers with a higher-than-necessary cost structure due to the GDSs blocking innovation and lower-cost distribution alternatives.

The Circle That Ties

To preserve their market power and block competition, the GDSs have implemented contractual hooks into each of their commercial relationships with airlines, travel agencies, and third-party technology providers.  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.

 

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 »

© evgenyb – Fotolia.com

Wow, look at all this fuss being made over the IATA NDC (New Distribution Capabilities) initiative. And I was so much looking forward to some R&R over the holidays.

Before we start, you need to know that I have not been a glowing fan of some of the IATA moves over the years, but this initiative—NDC—is one I think is rather insightful and extremely helpful not only for our airline industry but also for consumers, third-party developers, and travel agencies alike.

So let’s start to unravel the fuss with an understanding of what a schema actually is (in this case, a technical development schema) because I am pretty sure that most of the folks making all the fuss have most likely never worked with a technical schema or probably even seen one in real life. (I have attached a piece of a schema below so now they can attest to at least seeing one). A technical schema is a roadmap with very specific directions that, if you follow, will get to where you want to go–technically speaking, that is. In other words, an XSD schema file (XML Schema Definition) defines the structure of an XML message/document to include, for example, elements and attributes (child elements, order and number of elements, data types, and more).

For example, let’s say you are at the zoo and you want to go see the zebras. You will probably start out looking at a map of the zoo. If you follow the path defined for you by the map, you will undoubtedly end up seeing zebras and not those pesky hyenas by mistake. Same concept applies to a technical schema. In our case, a technology developer wants to accomplish certain tasks by connecting to an airline’s internal system to request a seat map, or retrieve a PNR, or make an exchange, etc. The schema simply provides the predictable technical pathway to accomplish the task at hand.  Read the rest of this entry »

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.

© coramax - Fotolia.com

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 »

During the Innovation in Airline Distribution 2012 conference I had the pleasure of listening to a couple of lawyers talk about the ongoing litigation between the airlines and the GDSs, and I didn’t even have to pay for it. It was great, and it actually led to a bona fide epiphany. Here’s how it went down:

One of the attorneys was making a general reference to the competiveness of the GDS industry and commented that “the GDSs do compete very aggressively against one another by spending millions on agency incentives.” An innocuous and no doubt accurate statement, right? The GDSs spend millions of dollars (of the billions of dollars they collect in distribution fees from the airlines each year) to allegedly compete against each other. Big deal. But then it hit me like a 2,000 page legal brief.

 

© Steven Pepple - Fotolia.com

If the GDS spend all this money competing against each other for travel agency business, then how much do the GDSs spend competing for airline distribution business?

This question now haunts me. I am sure it will consume most of your waking hours just as it does mine. So let’s try to answer the question. Hmmmmm… better get out the abacus for this calculation. Read the rest of this entry »

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 »