American Airlines summoned travel management companies to Dallas late last year and unveiled the broad outlines of a plan to rewrite the airline-travel agency-global distribution system business model.
So says Paul Rudin, senior vice president of legal and industry affairs for the American Society of Travel Agents.
Rudin, addressing journalists in a conference call April 14, says the airline outlined the basics of a user-pay model.
The broad parameters of the plan is that GDSs, TMCs or corporations would have to pay for access to content such as bag fees and pre-reserved seats if booked within a GDS, and the same content might be accessed for free if booked through a so-called direct-connect, Rudin says.
However, details are scarce.
Would TMCs and the GDSs also have to pay for access to fares if booked within the GDSs?
How much would they have to pay for ancillary services or fares?
Which third parties would facilitate the direct-connects and be the preferred channels?
Rudin says the TMCs came away from Dallas with word from American that the plan was still being formulated, with much of the detail to be determined.
American hasn't commented publicly on its plans, but the contracts with corporations or the TMCs that service them aren't believed to be of the one-size-fits-all variety. Corporation A might have to pay American a certain fee to book a fare in a GDS, another fee to book an ancillary service and perhaps no fee if booked through a direct-connect, and the fee structure for Corporation B might vary widely, depending on the deal the parties forge.
ASTA, the Business Travel Coalition and more than 200 travel agencies and corporations sent a letter to major U.S. airlines asking them to ensure that they won't engage in distribution-channel discrimination.
Rudin says he's heard no rumblings from other airlines that they plan to implement a plan similar to American's, but he adds that history has shown that when one airline "makes a move that changes the nature of the game," then other carriers will follow.
BTC, ASTA and the travel management companies which signed the letter say they support the airlines' drive for new revenue streams from bag fees and other ancillary services, but want to ensure that airlines don't discriminate against TMCs and corporate clients if they choose to book travel through Sabre, Amadeus, Apollo/Galileo or Worldspan.
Several travel managers at the press conference spoke out against American's initiative.
Michelle De Costa, global travel manager for Sapient, says it would be virtually impossible to track spending and enforce corporate travel policies if ancillary services must be booked outside of the GDSs.
Karl Dring, general manager of the San Diego Travel Group, says he doesn't want to defend GDSs, which have "issues," but he wouldn't want to trade a transparent GDS system with a costly, inefficient, fragmented system.
Dring says not only would TMCs suffer from a fragmented system, but consumers would be "victimized," as well, because "costs get pushed down."
Asked whether American's user-pay model is a negotiating bluff in advance of GDS negotiations next year, Rudin says that the BTC, ASTA, TMCs and corporations have no choice but to take American at its word.
Says Rudin: American's plan "seems sufficiently serious" for now.