In the days of Web-only fares on airline websites in the U.S., traditional travel agents moaned that airlines were basically screwing themselves with this kind of supplier-direct discounting because the travel agency/global distibution system channel is among the highest-yielding distribution options.
After a period of abstinence, JetBlue re-entered GDSs in 2007, participates in the four major systems today, and views this involvement as a way to enhance its mix of corporate-travel bookings.
JetBlue's strategy was highlighted with Travelport's announcement today of a new, multi-year, global full-content agreement with JetBlue.
JetBlue already participates in Travelport GDS's Galileo and Worldspan systems, but the new pact, scheduled to be implemented in the first quarter of 2010, would provide upgrades, including enabling corporations and travel agencies to access the airline's last-seat availability as well as real-time confirmations for bookings and seats.
JetBlue's upgraded participation in Galileo and Worldspan would come as JetBlue is transitioning from Navitaire to Sabre as the host of the airline's internal reservations system. That change, too, is slated to be made early next year.
The move to Sabre not only gives JetBlue more flexibility, but also provides an enhanced ability to woo corporate customers, JetBlue officials say.
So why is GDS participation and going after the corporate market so important to this low-cost carrier?
After all, isn't there a pitched battle between supplier websites and the GDS/OTA channel for the hearts and minds of fickle, discount-hungry consumers?
JetBlue says that JetBlue.com, is its lowest-cost channel, and accounted for about 77% of its sales in 2008.
GDS and online travel agency distribution was the second-largest sales channel in 2008, attracting some 13% of total sales.
The remaining 10% of sales came through those home-based agents who staff JetBlue's phone lines.
JetBlue would like to increase that GDS distribution and its appeal to corporate travelers because tickets purchased through the GDS average 17% higher than flights booked on JetBlue.com, the carrier says.
Here's how JetBlue explained this new GDS-appeal in a 10-K SEC filing, published Feb. 13, 2009.
"Our re-entry into GDSs in 2007 has supported our growth in the corporate market, as business customers are more likely to book through a GDS, and while the cost of sales through this channel is higher than through our website, the average fare purchased via this channel is at least 17% higher, justifying the increased distribution costs," JetBlue says.
JetBlue President and CEO David Barger, during the airline's recent earnings call, spoke about how the transition to Sabre as the airline's internal res-system provider -- as distinct from Sabre's continuing role as a GDS distributor for JetBlue -- would bring some improvements as the airline seeks to increase its mix of corporate bookings.
"Moving to the Sabre platform will allow us to scale our business as we grow, including providing better integration with underlying code-chair partners [such as Lufthansa] and better connectivity to GDSs and online travel agencies," Barger says.
He adds: "We will also be able to better tailor our product to corporate customers and other key customer segments."
In coordination with the changeover to Sabre, JetBlue plans to make some as-yet-unspecified changes to its corporate travel program.
For JetBlue and other carriers, supplier-direct distribution is cheap, but it has its limits.