American Airlines furor? Air Canada, Travelport declare world peace

American Airlines may be at war with the global distribution systems, but Air Canada and Travelport have declared world peace and the advent of Distribution 2.0.

What Air Canada views as a pivotal moment in travel distribution comes in the form of a new full-content agreement between the airline and the GDS.

Under the contract, Travelport’s Apollo GDS accesses Air Canada content through a new Air Canada API called ac2u, which went into production just before Christmas. The new API is licensed from Farelogix and is compatible with the emerging Open AXIS Group XML standards.

Just as American Airlines is in the midst of a fervent battle with the GDSs, Air Canada was an early mover in airline merchandising, with its family of branded fares, and is a veteran of such skirmishes.

Air Canada battled the GDSs and saw its flights biased — American Airlines-style — in 2006 when Air Canada withdrew its Tango fares from the GDSs, arguing that the GDSs didn’t have the technological capability to display and merchandise its inventory properly.

But, that was then and this is now, according to Air Canada.

Under the new Air Canada-Travelport agreement, Travelport commits to launching an enhanced version of its Agencia travel agent desktop in Canada in the first half of 2011, and Air Canada will provide agencies with all of its fare families, seats and availability, as well as optional services, including paid seat assignments, pre-paid meals and Maple Leaf Lounge access.

In the process, over the last five years, Air Canada has evolved from a staunch GDS critic — one of the most outspoken among airlines in North America — to a carrier which has a lot of good things to say about Travelport as a GDS vendor that is willing to adapt to the times.

Graham Wareham, Air Canada’s senior director of product distribution, hails the agreement as the starting point of Distribution 2.0.

He doesn’t refer to American Airlines and Sabre specifically, but Wareham says other carriers and GDSs might take note of what Air Canada and Travelport have accomplished.

“There doesn’t need to be mud-slinging and lawsuits,” Wareham says.

In fact, it appears that in this new full content agreement with Travelport that Air Canada has achieved many of the aims — short of the economics, perhaps — that American Airlines is pursuing with the GDSs as far as asserting control over its merchandising efforts.

Using the ac2u API connected to the Travelport Agencia desktop, Air Canada provides more “authenticated shopping,” as Wareham describes it, than is currently the norm in the airline-GDS model.

Using the Farelogix Fare Management System, Air Canada can authenticate shopping questions and conduct merchandising based on whether the traveler falls under a corporate contract, has elite status, or is a client of a preferred travel agency, for example, Wareham says.

Thus, Air Canada responds to the travel agency on behalf of their clients rather than in the traditional way where it is the GDS responding to the travel agency on behalf of the airline, Wareham says.

Under this scheme, the GDS becomes more of an integator of supplier responses and merchandising rather than running the merchandising show, Wareham says.

Wareham gives credit to Travelport for its willingness to adapt to technological change.

“You can’t put your foot on technology forever,” Wareham says.

Air Canada hopes to strike similar deals with Sabre and Amadeus.

“This is, for us, what we’ve been trying to achieve,” Wareham says. “We would gladly be willing to do this deal two more times.”

So, how can Air Canada come to terms with Travelport, yet American Airlines finds itself facing the open wrath of Travelport and Sabre, with Amadeus possibly fuming on the sidelines?

There are multiple factors, but Air Canada doesn’t seem to be wielding as heavy a stick as American Airlines apparently is when it comes to American’s goal of trimming its distribution costs.

Wareham says Air Canada is focusing as much on the revenue side of things as it is on costs, adding that Air Canada “wants to be on all shelves.”

To be fair, American Airlines, too, says it wants its inventory distributed through GDSs, albeit through AA Direct Connect.

“It is critically important for us is to get the revenue upside that merchandising affords us,” Wareham says.

The struggle for Air Canada to improve authenticated shopping and distribute through Travelport didn’t proceed on an even keel.

Wareham says an earlier version of the Travelport Agencia desktop “kind of landed heavy,” but the fault was not Travelport’s alone.

Air Canada’s merchandising efforts didn’t integrate with profiles and back office functionality, Wareham says, and it was slow.

But Wareham says the primary reason response times were slow was because of shortcomings in an earlier verson of the Air Canada API, which was too dependent on the airline’s Web offering.

He says the new API, using Farelogix FMS, is more dyanamic as the fare management system enables Air Canada to determine who’s making a query and what that individual shopper means to Air Canada.

In working with Travelport and reaching the full-content agreement, Wareham says the two worked on a list of 36-40 items that needed to be improved.

Reaching an agreement with the Travelport GDS was important to Air Canada because the airline believes “foregoing revenue is not something we want to sustain,” Wareham says. “We get great uptake on our ancillaries.”

For now, Air Canada and Travelport are focusing on bringing these new merchandising capabilities to the Canada market, but the agreement is global in scope.

Whether authenticated shopping through Air Canada’s new API and the Agencia desktop works as well as the picture Wareham paints remains to be seen — because the enhanced version of Agencia has not been fully launched.

Meanwhile, much of the travel distribution world is watching developments in the American Airlines-OTA-GDS battles.

Might there be something in Canada worth finding out about, as well?

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Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.



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  8. Evan James

    All fine and well, except, at what cost to travel agents? Surely whatever economic benefit accrues to AC as a result of this arrangement must have an offsetting cost for someone else.

    GDSs are not inclined to work for less money. So, what do agencies have to pay to access Agencia? Is it transaction based or monthly fixed fee?

    Travelport/Agencia made this very same announcement with AC in 2009 … and that ended up being much ado about nothing.

    Tell us who picks up the tab from AC’s likely savings. Inquiring minds want to know.

  9. Jim Davidson

    Generally I agree with Norm’s comment and will continue to say that in my opinion it has never been about anything except economics. This clearly shows that 1) this battle is not about anti-consumer selling or lack of transparency. It seems that consumers and agencies will be provided with fully transparent content based on traveler authentication, precisely as proponents of Distribution 2.0 have been arguing; 2) the allegation that direct connect limits the ability to compare choices is also false, as we see here how an airline can, in fact, control its product distribution and product display in a multi-source setting; and 3) the rumors that Distribution 2.0 requires “one-off” direct connects that will completely disrupt our industry are nothing more than stall and delay tactics by the status quo proponents. The fact is both AC and AA are using the single industry connectivity standard (Open AXIS), which clearly can work through the GDS as easily as it can by-passes it. In the end, this battle is solely about protecting the money! Assuming Travelport is not doing all this for Air Canada for free, it seems like a mutual value proposition was struck.

  10. Dennis Schaal

    Dennis Schaal

    Norm: Great analysis on your part. Yes, if Air Canada indeed takes control of its own merchandising and can support these volumes on a travel agency desktop, then almost the entire debate comes down to economics, doesn’t it?

    While the details of what AA is asking economics-wise is unknown, it appears that AA is being much more aggressive than Air Canada.

    There is a fear among some OTAs, if not GDSs, too, that AA Direct Connect will lead to the you-pay model….where GDSs and OTAs pay for airline content rather than the converse.

  11. Norm Rose

    This agreement pokes holes in AA distribution debate for BOTH sides (airline and GDS/Distributors). It negates the GDS argument that the alternative GDS connectivity is incapable of supporting volumes as it was obviously considered robust enough for Air Canada’s requirements. It also reinforces AA’s position that the airline should control merchandising. The agreement also recognizes the essential role of the agent desktop (particularly important for corporate travel)in delivering these fares and functions to all points of sale. On the AA side, if Travelport can do this for Air Canada, the only key issue seems to be price, rather than technical limitations or unwillingness to embrace a new business model. This is a significant break in the battle and it is very ironic that it is Air Canada, an early leader in merchandising, reaching agreement first with a GDS.


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