European deregulation of global distribution systems won't be finalised before mid-2006 at the earliest, Association of Corporate Travel Executives' members have been told. However, whenever it happens, corporates will end up with an even bigger bill.
Presenting an ACTE-sponsored ‘Power Talk' at London's Meliá White House Hotel last week [Nov 30], consultant Alex Cruz said the EC-commissioned Brattle Report, published in October 2003, outlines three possible routes to deregulation.
No matter what ends up on the statute book, however, the corporate cheque-book is going to take a hammering.
Any relaxation of regulations will “fragment” GDS content, Cruz said, as airlines vie for preferred treatment.
“We're dealing with multiple products, from multiple providers, in multiple markets, over multiple geographies,” he told his 50-strong audience of travel management professionals.
“Over time, there are bound to be some ‘preferred' arrangements – because that's the way it works in other industries.”
Cruz, a former Sabre executive who founded his own consultancy and is now moving to Accenture as head of aviation practice, Europe, also revealed the results of an earlier poll of ACTE members.
Nearly three-quarters believe GDS costs are “highly relevant” to their businesses, yet 92 per cent say GDSs don't give them what they want. For all that, only 14 per cent have switched GDSs in the past three years.
Of the three legislative possibilities put forward in the Brattle Report, the favoured option would retain clauses which mandate participation in a GDS by, and which insist on non-discrimination by, “parent” airlines in their home markets.
Specifically aimed at Amadeus, which is still effectively owned by its airline “parents”, the legislative approach would prevent Amadeus biasing displays in favour of Lufthansa – for example – in the German market.
By levelling the playing field, the report argues, airlines would be encouraged to offload their GDS stakes. However, Brattle acknowledges – and Cruz believes – such clauses would be difficult to police.
Whatever form it takes, deregulation means GDSs could theoretically incentivise agents to use their particular systems and so up-sell favoured airlines.
Content fragmentation would mean corporates “may have to pay more to get access to required content”, and “display bias means you may not be able to believe search results, so you might have to invest in ‘counter-bias' technology.”
Small wonder, then, that 70 per cent of respondents to the ACTE poll answered “yes” to the question “Do you believe your company's travel management processes will change as a result of deregulation?”
By Bob Papworth
Bob Papworth was named Business Travel Writer of the Year at the new CWT Business Travel Journalism Awards