Much has been written about "full content" being the way that GDSs control their relationships with the airlines.
But is there a dark side to this - that full content contracts actually harm many different players because the GDSs don’t have the ability to provide full content capability, the ability to correctly and fully display the content that in essence they have exclusivity to?
While there is a lot of noise about the airlines not providing their content equally to the GDSs, this could be a smoke screen for a far worse sin: the legacy GDSs do not display the content fully and fairly.
Today, GDSs and airlines enter into agreeements via a common contract form. This is called the PCA (Participating Carrier Agreement).
The basic essence of the full content portion of the contract is that the airline agrees to provide the same content via a GDS as it does down any other channel, including its own – such as its website or call centre.
In return for this great deal, the GDS gives the airline a "deal" on its rates.
As the debate over the airlines and the GDSs rages far and wide, it has become clear that this agreement is perhaps one-sided.
Most airlines – and, indeed, regulators and the general public - have assumed until now the GDS is actually doing a good job of providing access to its content.
So the airline is carrying out its part of the agreement. However the question of whether the GDS is doing its side is emerging.
Allow me to be specific.
If the GDS has signed full content agreements with all airlines available, then the GDS is by law required to display all information fairly and equally (however, not in the USA, as there is no regulation requiring this).
The theory has been that the GDS is the arbiter of what is possible and what is not possible, therefore the GDS treats all airlines equally.
So if the algorithms built into the GDS have a flaw, all airlines are treated in the same way, equally badly.
Actually, this is not the case. The inadequacy of the technology discriminates against consumers and airlines.
Here is how:
In a neutral display, the airlines see their products shown in a results screen equally. Fine if you are a non-stop or a direct airline. But what about the connections?
Actually the GDS is discriminating against ANY airline which has more than a double connection (actually three flight segments).
For example, Emirates offers a wide number of connections including double connections in Australia on the way to, say, New Zealand.
Furthermore the GDS cuts off the total number of available choices at a certain number of lines and also will not display all fares.
This is a technical limitation of the mainframe systems on which GDSs are based. Thus, if your airline is below the threshold of the possible choices as determined by the GDS then you are SOL – sorry, out of luck.
Who is the loser in this? Actually, just about everyone - the airline which has been disadvantaged and the consumer.
The consumer is denied full choice; the airline is denied the ability to sell fairly with other airlines. For the smaller carriers this is bad. The bigger airlines don’t need to worry quite so much.
For those airlines which in international markets have complex itinerary options, the GDSs fail to display certain results (such as the example I raised above) in any form of search.
I would even challenge that in some cases that the GDSs will NEVER return certain viable results for some airlines and their products.
Sadly the airlines who are affected tend to be so fearful of the GDSs that they keep quiet for fear of retribution.
In the cases of the use of complex fares, GDSs can never return a result in search. Just try to go from Northern Europe secondary cities to Australasian secondary markets. The PCAs tend to be very one-sided in this respect. Up until now, technology did not exist that could prove otherwise.
For those of us who have been working in fares for a long time, we have just accepted the legacy restrictions with a shrug.
But now we can see that new fare tools such as those from ITA Software and Everbread have far better search mechanisms than the GDSs.
The tools result in better options - and more of them - for the consumer. The tools enable a good travel agent to be a better travel agent, for example.
And, of course, these are online tools to find options that previously just were not possible.
This is clearly a value that Google has seen and one of the reasons why it wants to get its hands on hot property ITA.
So where does this put the full content agreements that the GDSs sign with airlines, especially now - as shown above - the results are somewhat confusing?
These new search and shopping tools show that the consumer can have access to better possible results - consumers can now see which choices are possible far better than the legacy tools of the traditional GDSs can provide.
The search and shopping process is very important. But the fact that the GDSs strong armed the airlines and restrained the use of advanced search tools for so long is now clear.
The advances in search that Google (and others I hasten to add) have brought to the general consumer market have been denied to consumers of airline products.
To demonstrate, one only has to look at what percentage of search in airline tickets starts at a search Engine (eg. Google) vs starts at a metasearch or online travle agency.
This situation should not be allowed to continue unchecked, but the legacy GDSs and their allies are obfuscating the issue by focusing on the source of the content rather than the presentation/manipulation of the content - which, to me, is a far bigger issue.
Why? Because the setting of pricing is the result. We must remember that the airline ticket is one of the very few products available anywhere, where the creation and price setting of the product is determined by downstream intermediaries.
For this reason it is an unusual case and, yes, deserved of a full not partial analysis of the impact to the consumer and the competitive situation in the market.
NB: Disclosure – O’Neil-Dunne is CTO and deputy CEO of Lute Technologies, which is a partner of Farelogix.