Why Direct-Connect could be a pain for travel agents

NB: This is a guest post by Murray Harrold, a homeworking business travel agent from Buckinghamshire, UK.

In a previous article, I talked about the spat between American Airlines and online travel agencies. But I mentioned that the GDS element would be another story.

The selling of cheap tickets is one thing with which travel agents are, frankly, bored.

If you wish to sell A to B for $10 on your website – fine, get on with it and stop boring the whole travel industry to death.

Again, listening to pundits saying how this selling of cheap products will bypass the traditional agent and put them all out of business is also, very much, dull, dull, dull.

What these pundits have missed is that travel agents have actually moved on – a lot.

business traveller

Most have clearly never stepped foot in a travel agency for a long time – if ever – and they really ought to. They may find out what traditional agents actually do these days.

I digress.

But not selling your inventory on cheap fare websites is one thing, bypassing the GDS systems is another. We have to remember here, that Americans, bless them, do have a rather blinkered view.

They often have great difficulty accepting that there is a world outside the 52-odd states and, sticking to that, what works for them, may well not work for others.

My greatest concern then, is what happens if agents have to book on a direct system rather than have access to AA flights through the traditional medium of the GDS?

Business travel, as everyone is aware, consists of an awful lot of people paying premium fares and, if not premium fares, certainly nothing around the £10 mark.

Try booking on a 07:00 flight from London’s Heathrow Airport to, say, Amsterdam and see what you can get, fare-wise (even booking weeks ahead)?.

Business travelers often need flexibility (which costs them a lot of money) and, more often than not, have travel arrangements that involve a bit more than a two-hour hop down the road.

This is when not being on a GDS starts to become an issue. The GDS controls global – that’s global – travel and still controls highly profitable routes such as the North Atlantic.

It is little wonder that whereas a legacy airline might not have an issue missing out on New York to Boston, they will also be a long way down the list for Paris to New York, meaning they may get a tad hot under the wing-tips.

Now, we need to have the GDS for two fundamental reasons – the ability to interline and the inclusion in any complex ticket of the MCT (minimum connecting time) concept.

As these two concepts are clearly not understood, look at the following itinerary:

AA-BIZ1

Simple enough. At present the fare goes like this:

AA-BIZ2

Look at the fare. The important bit is the X/LAX bit – in other words, the fare is calculated as being from Dallas straight through to Auckland.

This model is broken, people cry. To have better fares, transparency, more olives in our salads, people must book on our system direct.

Okay, let’s split this up because, being on two systems, we will have to have two tickets, one on American and the other on Air New Zealand.

Now look at the two prices, with Fare #1 on American Airlines:

AA-BIZ3

…and Fare #2 on Air New Zealand:

AA-BIZ4

The new “transparent” system offering “wider choice” etc etc etc has just cost my businessman an extra £364.

But the problems do not end there – because there are two tickets, we are now on two separate journeys. So, do we have enough time to arrive in Los Angeles (allowing for any possible delays), collect bags, go out, go to Air New Zealand check-in and make the next flight?

Under the MCT rules, on a through ticket, yes, you would – and if you didn’t it is the responsibility of the delivering airline to sort you out.

Under a proposed new regieme, it’s tough – buy another ticket/pay a change fee. Oh, and the next flight is tomorrow, so it’s a night in the terminal and pay for the hotel!

So, back to the days of the ark for business travel with direct connections. I now have to call American (or go online – it makes no difference) and fix that bit…

But in the meantime my seats have gone on Air New Zealand (or, of course, vice versa). In fact, we have gone pre-Noah and his ark.

Business travel (and for “business” read “premium” or “big ticket”) will become impossible to organise.

Of course, if only American elect to come out of the GDS world, it will prove, very much, a Pyrrhic victory. I would be very surprised if there are many legacy airlines who would take that decision lightly.

A global airline has to have global distribution and it has to be able to work with other airlines. Global distribution of the world class (literally!) standard that you see in the likes of Sabre, Amadeus or Galileo costs money.

Whereas you can cut commission, it will be another matter if you try and say to an agent, you will have to pay us for the privilege of selling our product.

A battle with the cheap ticket sellers is one thing, but if the big global TMC’s get upset and start to shift premium traffic, it will not be the share price of the likes of the OTAs that take a tumble.

Of course, the direct connect system could well bring on board other airlines – many other airlines, to keep the global TMC’s happy. Which new system, of course, they can couple together and call… a GDS!

NB: This is a guest post by Murray Harrold, a homeworking business travel agent from Buckinghamshire, UK.

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Viewpoints

About the Writer :: Viewpoints

A founding principle of tnooz was a diversity of viewpoints from across the spectrum. Viewpoints are articles by guest contributors from around the travel and hospitality industries. The views expressed are the views and opinions of the author and do not reflect or represent the views of his employer, tnooz, its writers, or partners.

 

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  1. Edd

    I would think a big problem for an agency would be changes to mid and back office systems, which is a area that the GDS is very helpful with automating (particularly because it has changed little in the last 20 years). Of course, these systems will adapt to include multiple direct connections, but it will add more points of failure, and increase code complexity, and lots of other non-technical problems.

    Another fundamental reason of how we have reached where we are today in my opinion is that I don’t think the GDS’s have made the most of having an application on the agency desktop (e.g. the Amadeus marketing says they are used by over 90,000 travel agencies http://www.amadeus.com/amadeus/x67283.html). This should be a position of strength that should be exploited (with non-GDS content), but it hasn’t gone very far beyond the traditional green screens in terms of how the majority of users actually use it. I can see this changing, with more improvements this year between Amadeus One/Sabre Red/Travelport Universal Desktop, but it will take a serious amount of time before it is widespread and in use.

    I also wanted to say that I really enjoyed this article and hope we get some more from Murray! I don’t understand why companies don’t ask the real system users for feedback, but rather make assumptions about what is needed.

     
  2. Evan James

    Hogwash … Murray is presuming that AA Direct Connect means “Bye Bye GDS”. If anything, the Travelport/Air Canada and Travelport/Southwest deals prove otherwise. The pure and simple fact is that the GDSs don’t want to connect directly to AA for economic preservation reasons. Direct connect isn’t new, and AA didn’t invent it.

    AA is absolutely right to want a more robust, cost-efficient, one-to-many environment which embraces direct connect. The weakness in Murray’s protestation is that he has succumbed to the erroneous conclusion that for GDSs, direct connect means “only connect to you”. It doesn’t.

    Direct connect is simply a better, more cost-effective way for a supplier to deliver its content to a multi-supplier environment.

    I wish people would stop all the rhetoric about the isolationist, segregating intent of direct connect. That’s not what this is about.

     
    • Murray Harrold

      Well, perhaps AA should be more clear about what they propose, then. If what they propose is a global air booking system with full IATA functionality across airlines (ie interline) and all the other features presently available via the GDS, then that is of course a different story. (which would be… err… a GDS) In which case, their new product presentation is ruddy awful. At present, it appears as a system that will only book, push out to others and derive inventory from, AA. We have not heard mention of how they propose to interface with their OneWorld/ codeshare partners.

      Some low cost carriers do indeed appear on the GDS systems and are bookable there (with a bit of fuss, but bookable) they can’t be used in multi-sector itineraries, though. (‘cos low cost boys don’t interline) Try booking BEY LCA DUB with ME to EI sitting in the itinerary – in theory you can but you have to use the full price EI fares or book EI online and then the fare (and the connection) goes to pot.

      Anyway, GDS’s already connect directly to airline. So, yes it does, at present, sound very very isolationist and very segregating to boot.

       
  3. Sabre ending agreement with AA (Aug 2011) - Page 6 - FlyerTalk Forums

    […] especially at the fees they are charging. Yes there is, and yes they do. Case in point: https://www.tnooz.com/2011/01/19/news…travel-agents/ The economics may change, but there still needs to be a central place where all fares are […]

     
  4. Timothy O'Neil-Dunne

    So here is a set of questions that Murray didn’t quite ask – but I will ask it anyway. I don’t want to be the third in a string of people picking on Murray – however I understand his point. If the airlines do start exiting the GDS then the value proposition of the GDS falls. But I guess we dont have to worry about that potential any more… Two legacy GDSs already made that decision to remove (more) freedom of choice from their market.

    So here are a series of questions – we should consider.

    What if I could have a system that did just what Murray says only he as an agent can do?

    What if I could put that tool in the hands of the consumer (with some constraints) or the agent (with no constraints)?

    What if I could do all this in a lot less time AND with broader options that could actually give the consumer more choice than the legacy GDS alone?… and could include any source of supply irrespective of whether it was direct or not?

    That is an interesting series of questions. if such a system exists – it would somewhat demolish several arguments I think.

    So let me now go to Murray’s questions. Let me take the opposite tack. If I knew that the potential saving was $364 vs the risk would I make the decision? If there were a family of four that would be like having a free ticket! So would I go for that… possibly. BUT the important thing is that I would know to make that decision rather than having someone make the decision for me.

    Freedom of choice should be always a consumer’s right. But an informed choice is always a better choice.

    Cheers

     
    • Murray Harrold

      I am not holding my hat up for the GDS systems! What I am saying is that, however you wish to proceed, using whatever technology, we must have a system that provides as much functionality – “bookability” as the current legacy GDS systems. If such a tool was made available then you still need someone who knows how to ask for what the customer seeks. One of the things I have to do all the time, as an agent, is to get behind what the customer wants, which is not always the same as what the customer thinks they wanr – and certainly not the same as what an indivudal airline whishes to serve up.

      Granted, I (or any agnt) is by no means perfect and it is not rocket science but there are still many, many ways of carving a chicken, here and if you get it wrong, the difference can cost many bucks.

      May I also make it clear that one is not loking at simple point to point stuff. I and many other agents recognise that we cannot add any value to the simple stuff, save in the corporate world where comapny policy policing, reporting etc is needed. And Yes, I know there are systems that can do that, but there are no systems that can look at something and just know something doesn’t look right.

      So, yes, if you can reinvent the GDS – great… but it still sounds like trying to re-invent the wheel to me! Perhaps, in this case, as Churchill said: “To jaw, jaw is better than to war, war”

       
  5. Evan

    These are valid, but relatively niche points to push back on the entire Direct Connect system. What percentage of transactions are interline? 2%? 1% 0.5? Less? I don’t know, but I’m guessing extremely small.

    Additionally, to suggest a whole new distribution process is invalid because of something like minimum connection time is parallel to suggesting the 787 won’t fly because the mood lighting doesn’t work. 1) It’s just not that important and 2) It’s fixable.

    Also, Direct Connect might not apply to 100% of tickets. AA is asking agencies to use Direct Connect, they aren’t saying they’ll no longer offer any inventory through GDS for more complicated GDS-worthy transactions.

    Finally, if GDS were simple pipes connecting lots of Direct Connects (aka Farelogix), then AA and DL wouldn’t be complaining. If one of the GDS wakes-up and actually builds this product, perhaps they’d win in the marketplace, especially if they do it before Google/ITA.

    PS: Qantas flies DFW-LAX-AKL with a code-share on AA DFW-LAX, so you don’t have to worry about interlining.

     
    • Murray Harrold

      No, it’s not small in any way. The USA is one thing though what applies to the USA does not apply to the rest of our globe.

      Indeed, of the tickets I do, probably well over half require interlining/ MCT functionality. I don’t know your background, but the requirement of MCT is fundamental and very, very important. Take a look at some of the rather tenuous connections offered on some websites using low cost carrier to low cost carrier connections and see how long a layover they suggest…. and it may not work even then. With MCT this is reduced to as little as 45 mins, sometimes even less with the responsibility for getting the passenger to his destination being the delivering airline’s responsibility.

      In any event a GDS is, effectively a set of pipes connecting to the airlines, already!

       
  6. Jim Davidson

    Maybe Murray needs to get out a bit more. While his quote “we need to have GDS for two fundamental reasons – the ability to interline and the inclusion in any complex ticket of MCT (minimum connect time)” is factual in one sense — a GDS does provide both of those things today…however, neither require a GDS. Interline requires access to airline inventory and IATA standard airline-to-airline messaging capabilities and MCT is simply a file that populates a rules engine. While I know that Murray is not sayng this…but if interline and MCT are all anyone needs the GDS for, then they may be in more trouble than I thought.

     
    • Murray Harrold

      Of course, you are quite right. Let me rephrase it, as you suggest, to a system which has, inter alia, “the ability to interline and IATA standard messaging capability”. How that is provided is, of course, not solely the premise of the present GDS systems. If AA’s direct connect does provide this, on a global scale then fine. Thank you for making the point, though.

       
 
 

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