Air France-KLM signs Amadeus, reveals its distribution cards

It is an ever edgy relationship between airline and global distribution system and now more than ever because of IATA‘s plans for a new distribution system.

A few years ago the battlelines were drawn over the booking fees paid versus newer and potentially cheaper alternatives in the market whereas now the debate is around technology to make ancillary services easy to sell.

Air FranceKLM has just signed a multi-year full-content agreement with Amadeus which includes the distribution of KLM’s Economy Comfort and Air France’ Seat + services.

But, senior vice president of global sales and distribution Jean Wieviorka for the carriers continues to find himself stuck between a rock and a hard place.

On the one hand, Air France-KLM gets 60% of its business from outside the home markets so he freely admits to needing the global distribution giants.

On the other, Wieviorka feels the group is paying GDS who, he says, have been very slowly to react to the evolving airline need to sell new products and ancillary services via travel agents.

Unsurprisingly, Air France-KLM is a keen proponent of IATA’s New Distribution Capability and a member of the Passenger Distribution Group, the steering group for NDC.

“We need the GDS to get the revenues because our direct online sales are weaker in non-home markets. We are always keen for full-content agreements to sell our fares and ancillaries because we need to access the market.”

Alongside the need for distribution to the agency community (both online and offline, leisure and corporate) is a desire for standards. The carriers do not want to have to develop interfaces between the ‘home systems and the GDSs on the planet’.

In direct sales channels it has been using Electronic Miscellaneous Document – the IATA messaging standard enabling airlines to share information on issuing, managing, distributing and fulfilling airlines services – for some time but, again, feels implementation amongt travel agents has been slow.

 “For me there is one thing which is not going well with the GDS. We are paying booking fees to them and agents have to be trained to sell our services.

“I fight with the GDS all the time becuse they don’t want to train the agent and it’s not acceptable. For me it is lost revenue. We need them to sell and they tell us they need us to distribute our ancillaries but they don’t do the work on their side. They also say they need other carriers to introduce ancillaries.”

He cites KLM Economy Comfort as an example of a product which, he says, has been available in direct channels and GDS since 2009 but agents in many countries cannot sell it. Wieviorka says the fare is not sold in the US, Asia, South America or Africa and blames lack of GDS technology investment as well as agency training for the gap.

The Way Forward?

Wieviorka believes its IATA’s NDC and that introduction of the new platform could happen quite quickly once the airline body has the buy-in of the travel agency community. There are some out there who might disagree given concerns raised with the European Commission’s transport and competition divisions last year.

He stands firm on his position that IATA is the right place for collaboration between airlines and distributors.

“We have to continue to work with agents. As soon as this is cleared up I think it could move quite rapidly because the technology exists. It’s not a revolution, just adaptation.”

However, the agency and GDS community still have many concerns, not least, who will pay for the new platform integration, who will own/control the customer information and how will airfare transparency be maintained.

Releasing details of the renewed content deal, Holger Taubmann, senior vice president, distribution, Amadeus says:

“Given the important role which travel agency distribution plays, long-term content agreements like this provide stability to both airlines and travel agencies alike.”

More detailed response on IATA’s distribution moves from the GDS is available here.

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About the Writer :: Linda Fox

Linda is Managing Editor for tnooz. For the past decade, she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine. In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management, and research companies. Prior to her freelance career, she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.

 

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  1. The real NDC: Decoding the planned (r)evolution in airline distribution by IATA and airlines | Tnooz

    […] via GDS since 2009 but agents cannot sell it in the US, Asia, South America or Africa because of a lack of GDS investment and agency training, according to a senior vice president at Air […]

     
 
 

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