Airlines warned giving Google any data will ensure you’re hostage to it for life

It’s almost remarkable that over five years have now passed since Google made its first significant foray into the travel industry.

Google had, lest we forget, been working “within” travel for years – trousering billions of dollars in marketing spend from almost every brand in the industry through its keyword-buying programme (PPC advertising).

But when the search giant’s splashed out $700 million to buy ITA Software, the fare and pricing technology company in the US, many saw the move as a statement of intent.

That aspiration to do something meaningful, however, is arguably only being felt now – half a decade on.

Google Flight Search, the product which materialised around 15 months after the acquisition was made public (and five months on from the regulatory approval needed to close the deal), still polarises opinion.

It’s not a precise Skyscanner or Kayak clone, obviously – it’s something else, something much deeper than simply offering a me-too metasearch product to consumers (here’s a video ad for the product in 2014).

Putting its airfare search results at the top of the search, ahead of organic listings and advertisers, was an obvious move as it ensured it moved ahead of everyone else at that point in the ticket browsing funnel.

And this is where, despite the ITA Software deal being labelled a “disaster”, aviation industry figures are beginning to have concerns.

Cartrawler chief technology officer, Bobby Healy (provider of the aforementioned one-word analysis on the ITA Software acquisition), says airlines must now seriously consider how they work with Google, and what type of relationship they want to have.

Speaking at the CAPA World Aviation Summit in Helsinki last week, argues that if airlines “give away their availability and pricing to Google, then they will have to be hostage to them” in the future.

Why?

Airlines are currently “uniquely positioned at the front of the purchase/trip planning timeline,” Healy says, “ahead of Google”.

This, he believes, is a position of strength that allows carriers to have an advantage that any retailer in the world “can only dream of”.

“[Carriers] Giving Google their inventory and pricing in a live way allows Google to get in ahead of them – and with ITA [Software] they certainly have the tech to do this.

“Once that happens, an airline could not possibly pull out as all their competitors would be there – bidding on micro segments of business in realtime.”

Healy believes the whole airline landscape could be changed by Google as a result of a mass donation by airlines of their data and other search and shopping-related information.

And, he argues, “for certain the business of operating an airline would be won by the low cost operations”.

But perhaps of equal importance, given the rise of ancillary service selling by carriers on their own sites, Healy warns of the damage to airlines here, too, if a wholesale sharing of data was to take place.

He says:

“Any further retailing opportunities such as car, hotel, insurance – and everything non-air related – would no longer be sold by the airline, but would rather be sold to the highest bidder on Google.”

Such tales of peril are enough to send a room full of airline CEOs frantically dialling the mobile number of their strategy execs… maybe.

NB: Google travel image via Shutterstock.

NB2: Disclosure – author’s travel and accommodation costs were supported by CAPA event sponsor Travelport.

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.

 

Comments

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  1. Timothy O'Neil-Dunne

    I find myself agreeing with Murray Harrold (again) (see his comment below). The issue of finding the solution to what the customer wants and what he will use is not isolated. One thing I have learned from working with both Legacy and Low cost systems is that the passenger journey is not “joined up writing” and it should be. Rethinking what makes the entire consumer experience from the search to the bag delivery could be better – MUCH – better. That inclination to be willing to look at it seems to be off the table. And I can understand that. What I still struggle to understand is why the legacy fat incumbents are so keep to prevent almost ANY form of change. Its natural but the focus and energy that goes into that process is still just illogical. We could have moved on a lot more a lot sooner. This may appear to be a rock throwing exercise against my usual targets – but my comments are not just focused there. There is a lot of blame all the way round. The rest of us (and yes Murray that is you, me and many others), we all have a responsibility to bring about that change. So what are we waiting for?

    Cheers

    Timothy

     
  2. Stuart

    Wonder is one airline will be loony/oh-hell-it’s-just-Vegas-baby/brave enough to try it. If I ran an airline I’d say here’a the data – whack it in flights but can you add structured markup just for me. I’ll give it a go just for a year. Might save on adwords if nothing else. Lufthansa? They seem to be on the happy pills at the moment.

    I wonder

     
  3. Ashley Raiteri

    It’s too late. This is like a retailer expressing concern about giving Mastercard and Visa too much leverage by accepting credit cards. The damage is done, and Google’s power is already entrenched. The only defense the airlines who ARE at the TOP of the food chain, because they are offering the 1st step in the travel product package (thought the least profitable piece), the only defense is an industry wide response orchestrated by Airline JVs. Because Airline partner Groups (think DELTA/Virgin more than Sky Alliance/Star Alliance) have oligopoly’s on markets and routes. If I want to fly from Savannah to Manchester the only routing that makes sense is SAV-ATL-MAN. In most cases, alternate routings will take an 11Hr trip and turn it into a 22 Hr trip.

    The is the same of all One Stop or greater routes. And on these Market’s Routes, JV partners can tow the line and force agreeable terms with Google. Any other response is fantasy.

     
  4. Oz Har Adir

    While some of the commentary is correct (Google will monetize the traffic if they can), its obviously coming from someone who enjoys the current order (as CarTrawler is a supplier on many airline websites) and perhaps, is afraid of seeing that change. What is missing from this discussion is what is good for the user: open access to data, pricing and even open access to ancillaries. What is the great benefit of being marketed a feed of an external ancillary such as car-rental from an airline website other than some slight form of convenience? Why shouldn’t there be a new, open market, where users can see suppliers (such as CarTrawler) compete for their business?

     
  5. Roberto Da Re

    I believe that the point Bobby is making here is not about “functionality” or “who makes the booking”, but about “owning the eye balls of the consumer” .. if for the consumer the default “starting point” of booking a flight really does becomes Google, then the carrier websites (and everyone else’s) will disappear into the transactional background and truly “commoditise” the airline’s offering

     
    • Bobby Healy

      exactly Roberto. Airline execs are at the point go making this decision now re:google and so it’s time for everything to properly start talking about it.

       
  6. Alexander von Koslowski

    Mirroring a yield system, availabilty rules and inventory into Google like US Carriers are doing with Google Flights is something different than processing a PNR in a GDS.
    If an Airline Manager does not know the difference, I can not help him.

    Alex

     
    • Timothy O'Neil-Dunne

      +1 Alex!
      Let me add that there needs to be a better understanding of the “how” of data – not just the “what”. Google is one of the best users of data. That is one of their strength. GDSs who had the front end to all of this has squandered their use of data (despite making quite a lot of money from MIDT). I concur with Bobby on keeping the data out of the hands of Google as much as possible. HOWEVER this comes at a cost. The gradual encirclement of everything by Google makes there little chance that they don’t have a large portion of the picture. Where the Travel Industry in general (and the airline industry in particular) needs to get real is to stop thinking they are that special. What we need is a rethink on the Travel Supply Commerce layer. We are still operating in 1950s legacy thinking and severely constrained by it. Restraint by the shackles of the current PSS and GDS legacy designs have to be discarded if we are to get success. If not then big bad Google will eat you and your lunch in the same way they are consuming your customers.

      Just my opinion, I just ask that you think about that.

      Cheers

      Timothy

       
      • murray harrold

        +1 from me, too. Something must be wrong as I agree with Timothy.

        Airline Exec’s, on balance, are not exactly the sharpest tools in the shed. The plan was to ditch commission, get rid of paying agents, get everything online and Hey! Presto! All distribution problems solved. Un-fortune-ate-ly, OTA’s and certainly, Google did not/ are not following the game-plan. This must be hacking off airline exec’s big time. I said, ages ago, long before any of the content of this article, that the issue will be that the tail will wag the dog. Even further than this, there will be a time when the likes of the big (whoever) at the front will tell airlines where they fly, when and crucially, how much they will get paid.

        So, yes, we do need to errr… “rethink the travel supply commerce layer” (translation: how we flog travel) in that sense, the GDS systems have missed the boat, are now miles behind and are not even trying to play catch-up. GDS executives are asleep at the wheel. And yes, the travel industry needs to get off its high horse and stop thinking they are special. Like that. So very true.

        There is a cautionary note, here. A Boeing or an Airbus are not quite 15 bucks a week to the tally-man. Getting one to 32,000 feet with a full complement of passengers, costs a few bucks as well. Therefore, airlines (and other suppliers) are going to face a two pronged attack from rising costs on the one hand and downward price pressure from the font end, on the other. Result … I don’t know, but it is going to present some even more interesting issues!

         
        • Timothy O'Neil-Dunne

          Oh dear hell hath froze over! Murray and I agree!
          It would seem that there is clearly a jaws of death scenario emerging. Either rethink to fix (IE we can’t patch and put more lipstick on this old pig) or face the consequences of doomsday (aka Google).
          Whether you are a human managing the process or a machine – we have to have better infrastructure to do our respective jobs.
          OK take it away chaps… come back with good answers. (Pretty Please!) And enough with the brochureware. We need REAL answers this time

          Cheers

          Timothy

           
      • Alexander von Koslowski

        Timothy,
        don’t get me wrong. I see a diferent technology solution has to come. It is about time to diferentiate products and distribution ways. But as said, there are new opportunities to market products and there are new players. All I learned in the last 20 years is that the power of distribution and marketing will come with less fragmentation. Those , who collect, read and interpret the data right and have the power to reach the right people at the right time with the right price, will be hard to get in the box again. It is funny, that again someone, who is not producing or engeneering a product is about to be the leader in distribution.
        There must be smarter ways to market a product and reach the customer. Remember, it is not the easieest way to bypass those companies, but in the end it might be cheaper and helps to keep control.

         
        • murray harrold

          Tech is part of a solution to part of a problem. Thing is, it is not really trying to solve the right part of the real problem. Legacy airlines are not blessed with the brightest of executive spark.

          Many moons past, now, RyanAir tore up the rule book and came up with a new way of doing things. Ever since that time, (legacy) airline executives who then and in part, still, now, think that a Dakota is a great new aircraft, have struggled to come to terms with, well, pretty much everything, really. Tech seemed to be a great “thing” – pity that they didn’t – and still don’t – get it.

          So, what you have is an (arguably) great front end patched onto a rumbling behemoth of an industry that gets all up tight about Saturday night rules, “grandfather” rights, has over-unionised workforces, over-paid pilots and armies of people who think that the quill pen is a great invention.

          The whole thing needs to be re-engineered. Take it apart and start again. The distribution is not the issue. It’s the actual product and those responsible for the product.

           
  7. Scott Gillespie

    i don’t buy it. Replace the words “Google” and “PPC”with “GDS” and “segment fee”, and the article’s points are nearly the same.

    Oh…now I get it.

     
    • mike

      Think of airline taking control of selling hotels, car hire etc and keeping that profit for themselves instead of other companies taking it.

      What this article is saying is are these airlines willing to go back to being a seat seller and leaving google to take their cut of the ancillaries

       
 
 

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