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Industry forces continue to attack American GDS moves

24-Jan-2011

The action by American Airlines to remove itself from Orbitz continues to resonate, and has pitted American against the combined might of the GDS providers, as well as raising the ire of other industry constituents.

The battle escalates

Now Expedia and Sabre have taken American to task and are imposing their own retribution for the carrier’s stance. And Amadeus has made statements that, while not specifically mentioning American, forthrightly address “any development … that breaches these agreements, Amadeus will take the actions we feel appropriate and in the best interest of our customers and our business.” A less than subtle warning.

Adding to the blaze is the announcement that the “Mad as Hell Coalition”, formed to represent the interests of some US travellers in congressional hearings last autumn, has now reformed as another entity named Open Allies for Airfare Transparency (Open Allies).

Old friends become new foes

The American Society of Travel Agents (ASTA) and the Business Travel Coalition (BTC), both advocates for the new initiative, have issued a joint statement. In it they note that the group’s purpose is to “address the problems of travel distribution and the ongoing crisis between airlines, GDS systems and agents”, according to Travel Agent Magazine.

They have issued an open invitation to other interested parties who also “believe that all airline fares and fees should be transparent to the travelling public”. They should not be “hidden in proprietary airline systems, buried deep in airline websites, or obscured through channels that prevent comparison shopping and choice”.

Unlike Amadeus, Open Allies specifically points to American as the instigator of the fight and appears to be willing to go to the mat in an attempt to stop any further spread of the trend.

All out war

The group’s director, Andrew Weinstein, is tied to the Interactive Travel Service Association (ITSA) which includes Sabre, Travelport and other online travel agencies. Clearly these folks have a big dog in this fight and are crusading on behalf of the interests of established distribution channels.

Their claim is that they are defending the public interest by maintaining transparency in airline fees and ancillary services. They are dedicated to supporting the ability of travellers to make direct comparisons at any given site. But the fact that they have a strong interest in defending those sites is not immediately evident.

While the open comparison of fees and charges might well be a defensible position, the initial makeup of Open Allies is a group that has a great deal to lose should American succeed in substantially changing the current distribution processes.

Standing alone

In its drive to change the landscape, American finds itself singled out as a system spoiler and is amassing a formidable array of enemies. Nor are they getting much help from their peers who are content to let American lead the charge.

The one bit of good news for American is that it has signed a deal with Priceline.com, which has agreed to use American’s direct connect link.

Should AA prevail, they will gladly join in any initiative that provides reduced costs but they will make certain that any downside effects have been thoroughly tested by American’s trailblazing.

Losing has a consequence

Meanwhile, the assault continues with the BTC’s  January 11 statement entitled "AA’s Direct-Connect Gambit Is Risky Business: Is there a path to success?"

The gist of the article is perhaps summed up in the quote: “BTC could find no published industry analysis or airline or travel industry expert who could articulate a coherent scenario regarding how AA could truly succeed in its high-risk scheme.”

The stakes on both sides are very high and success by American could redefine the entire system of electronic distribution, severely weakening players that have been dominant for decades.

Should they lose, the status quo will remain in place and likely be unchallenged again for some time to come. Either way, somebody will take a thrashing.


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