Media Release
Does AA mean Agency Annihilation?
23rd November 2010
Webjet today slammed the American Airlines direct connect model.
Commenting Webjet Managing Director, David Clarke, said:
“The proposal by American Airlines to eliminate GDS distribution or make it economically impossible is based on some simply unbelievable and absurd propositions.
In a series of statements American Airlines has suggested, as an example, that GDS full content agreements negatively affect agents!*
What arrant nonsense. To suggest full content results in a detriment to an agency at any level or any form suggests they are flying in cloud cuckoo land.
The airline apparently intends to withhold boarding package capability unless the agent direct connects** and then suggests that agents are incapable of intelligently using customer data.***
Let us be under no illusion, the reality of all of this is nothing to do with cost, it is all about American Airlines selectively controlling content and capability as selectively as it may wish. The protective shield of the GDS is destroyed.
The reality of direct connections is from our extensive experience, massively expensive to develop and maintain. It requires very significant technology infrastructure and integration technology way beyond the means of small or even medium size agencies.
The GDS systems bring all this together in a massively complex process which has developed phenomenal distribution capabilities to world airlines and enabled travel agents to in turn provide extensive economic market penetration and intelligence. GDSs are not costly intermediaries; they are value adding on a massive global scale.
In today’s world of intense consumer bargain hunting no airline, however large, can fly in a vacuum. They need oxygen which is in turn a product of a consumer being able to compare different offerings in a simple and efficient manner and make an informed choice.
To place any obstacles in that path or provide anything less than full content, will simply result in the alienation of the customer. What a brilliant plan!
Paradoxically, moves of this type will simply serve to shift more and more power to the larger agents who can invest whatever it needs in brand and technology to ensure their customers have freedom of choice because then the customer knows they are valued and not hijacked.
The ultimate result is small agents will be annihilated.
If that occurs, American Airlines will rue the day because then they will be in the grip of enormous forces.
The cost of this ill conceived plan will then be incalculable.