Michael Smith, Managing Partner at Airline Information
“2011 looks like it is the year that the distribution challenge is coming back into focus. Post 9/11 as airlines focused on their costs, distribution charges from GDS were in the firing line. Deals were done and airlines moved fast to direct sales and push their own websites. 2009 into 2010 saw airlines looking at how they could distribute their a-la-carte fee options for items like baggage charges and extra leg room seats via the GDS’s and indirect distribution started to become important again.
This has led to two major trends. The first is “full content” (the term used by the main GDS’s when they sign deals with airlines) and the differing views on whether or not this includes all those ancillary fees and the unbundling of the fare. Many airlines are in full swing in getting this type of distribution and groups, like OpenAxis, have been formed to aid and assist the distribution of these products.
The second, led by American Airlines (on their own at the moment) has been Direct Connect. Now, depending on where in the industry you sit, this is either an attempt by AA to smash the alleged power and costs of the indirect distribution systems, or it is an attempt to gain control of the sales of the product and how customers view it and what price they pay.
This battle is really heating up with AA having to go to court with one GDS (and winning – at least at this stage in the process) and other airlines (like Air Canada) signing new “full content” deals with Travelport to distribute all their fare families and a-la-carte fees.
So will 2011 be the year where direct distribution to the trade (such as travel agencies and OTA’s) takes off? Watch this space!”
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