Since American Airlines told delegates to the Computerized Airline Sales and Marketing Association conference in October that it plans to move all indirect volume to direct connections, industry observers have wondered what such a world would look like and how it would change relationships among airlines, travel agencies, GDSs and customers.
Jim Davidson, chief executive officer of Farelogix, shed some light on the issue during the recent PhoCusWright conference in Orlando. "It's not about eliminating the GDS channel," he said. "It's not about either/or." Rather, he said, it's about satisfying airlines' desires to take control of their pricing and how their offers to consumers are presented.
And depending on how far airlines want to take their retailing independence, direct connections could be a game-changer for airline distribution.
Farelogix is involved in the building of XML connections between American Airlines and other entities, which include large corporate travel agencies -- those that have the means to build their own front ends -- and GDSs. In theory, that would enable airlines to cut the Edifact cord to the GDSs.
Davidson stressed that Farelogix' role is strictly that of a technology provider; it is not involved in the reshaping of the various relationships. Davidson did not address the project in his keynote address at the conference. Rather, he spoke of "lethargic technology" and an industry that is "unmotivated to embrace change."
He noted that corporate travel managers fear airline merchandising, in part because "we are focusing too much time on the bits and bytes of it rather than the meat of it." The industry has two challenges, he said: The airlines need to figure out how to present a solid value proposition, and they need technical processes to all the transactions to take place.
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Source - ATW
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