NB: This is a guest post by Murray Harrold, a homeworking business travel agent from Buckinghamshire, UK.
In a previous article, I talked about the spat between American Airlines and online travel agencies. But I mentioned that the GDS element would be another story.
The selling of cheap tickets is one thing with which travel agents are, frankly, bored.
If you wish to sell A to B for $10 on your website - fine, get on with it and stop boring the whole travel industry to death.
Again, listening to pundits saying how this selling of cheap products will bypass the traditional agent and put them all out of business is also, very much, dull, dull, dull.
What these pundits have missed is that travel agents have actually moved on - a lot.
Most have clearly never stepped foot in a travel agency for a long time – if ever – and they really ought to. They may find out what traditional agents actually do these days.
I digress.
But not selling your inventory on cheap fare websites is one thing, bypassing the GDS systems is another. We have to remember here, that Americans, bless them, do have a rather blinkered view.
They often have great difficulty accepting that there is a world outside the 52-odd states and, sticking to that, what works for them, may well not work for others.
My greatest concern then, is what happens if agents have to book on a direct system rather than have access to AA flights through the traditional medium of the GDS?
Business travel, as everyone is aware, consists of an awful lot of people paying premium fares and, if not premium fares, certainly nothing around the £10 mark.
Try booking on a 07:00 flight from London’s Heathrow Airport to, say, Amsterdam and see what you can get, fare-wise (even booking weeks ahead)?.
Business travelers often need flexibility (which costs them a lot of money) and, more often than not, have travel arrangements that involve a bit more than a two-hour hop down the road.
This is when not being on a GDS starts to become an issue. The GDS controls global – that’s global – travel and still controls highly profitable routes such as the North Atlantic.
It is little wonder that whereas a legacy airline might not have an issue missing out on New York to Boston, they will also be a long way down the list for Paris to New York, meaning they may get a tad hot under the wing-tips.
Now, we need to have the GDS for two fundamental reasons - the ability to interline and the inclusion in any complex ticket of the MCT (minimum connecting time) concept.
As these two concepts are clearly not understood, look at the following itinerary:
Simple enough. At present the fare goes like this:
Look at the fare. The important bit is the X/LAX bit – in other words, the fare is calculated as being from Dallas straight through to Auckland.
This model is broken, people cry. To have better fares, transparency, more olives in our salads, people must book on our system direct.
Okay, let’s split this up because, being on two systems, we will have to have two tickets, one on American and the other on Air New Zealand.
Now look at the two prices, with Fare #1 on American Airlines:
...and Fare #2 on Air New Zealand:
The new "transparent" system offering "wider choice" etc etc etc has just cost my businessman an extra £364.
But the problems do not end there - because there are two tickets, we are now on two separate journeys. So, do we have enough time to arrive in Los Angeles (allowing for any possible delays), collect bags, go out, go to Air New Zealand check-in and make the next flight?
Under the MCT rules, on a through ticket, yes, you would - and if you didn’t it is the responsibility of the delivering airline to sort you out.
Under a proposed new regieme, it’s tough – buy another ticket/pay a change fee. Oh, and the next flight is tomorrow, so it’s a night in the terminal and pay for the hotel!
So, back to the days of the ark for business travel with direct connections. I now have to call American (or go online – it makes no difference) and fix that bit…
But in the meantime my seats have gone on Air New Zealand (or, of course, vice versa). In fact, we have gone pre-Noah and his ark.
Business travel (and for "business" read "premium" or "big ticket") will become impossible to organise.
Of course, if only American elect to come out of the GDS world, it will prove, very much, a Pyrrhic victory. I would be very surprised if there are many legacy airlines who would take that decision lightly.
A global airline has to have global distribution and it has to be able to work with other airlines. Global distribution of the world class (literally!) standard that you see in the likes of Sabre, Amadeus or Galileo costs money.
Whereas you can cut commission, it will be another matter if you try and say to an agent, you will have to pay us for the privilege of selling our product.
A battle with the cheap ticket sellers is one thing, but if the big global TMC’s get upset and start to shift premium traffic, it will not be the share price of the likes of the OTAs that take a tumble.
Of course, the direct connect system could well bring on board other airlines – many other airlines, to keep the global TMC’s happy. Which new system, of course, they can couple together and call… a GDS!
NB: This is a guest post by Murray Harrold, a homeworking business travel agent from Buckinghamshire, UK.