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A leading travel management boss has entered the air fare distribution row by calling on airlines to put “sanity before economics”.
In a speech to senior corporate travel figures at the Guild of Travel Management Companies' (GTMC) annual general meeting, chairman Michael Hare said any strategy that drives bookings away from the global distribution systems (GDSs) was short term, irrational and potentially damaging.
Most TMCs have a GDS at the core of their business, as they believe it offers clients the most efficient access to global air fares, and allows the them to offer services such as detailed management information and traveller tracking.
The dispute has gathered in ferocity over the last two months since American Airlines’ (AA) launched its Direct Connect product, which bypasses the GDS.
Both Travelport - which owns Galileo and Worldspan – and Sabre GDSs are penalising AA fares. And alongside Amadeus, all three GDSs have signed up to the newly formed Open Alliance for Air Fare Transparency, spearheaded by the US-based Business Travel Coalition.
More than one hundred groups and businesses have joined the anti-direct connect group, including the Scottish Passenger Agents’ Association (SPAA), BCD Travel and Dell.
And a number of UK TMCs have decided not to book AA tickets.
As the GTMC’s status as a not-for-profit organisation prevents it from getting involved in commercial disputes, it would not call for an official boycott of AA. However, its chief executive, Anne Godfrey, said members had already been warned about the potential impact of direct connect products.
Some TMCs, such as HRG, are continuing to book AA flights on behalf of customers who have negotiated rates in place. As the airline is leveraging a surcharge on every sector booked on the Galileo GDS, its clients face being landed with a huge bill for which they have not budgeted.
AA believes its Direct Connect technology will allow it to maximise revenues from ancillary sales and provide it with more precise customer data, and there are growing concerns that other airlines may follow in its footsteps throughout 2011.
Hare said: "These [direct connect] systems, quite frankly, don’t deliver what the majority of corporate customers or the industry wants and needs. Think carefully before you put economics before sanity”.
Kevin Thom, the vice president of the SPAA and convenor of its air committee, said: “The GDS is fundamentally the most efficient distribution system available. It provides a proven and neutral mechanism for the display and booking of air travel. AA is attempting to force an unwanted and unnecessary solution on customers, regardless of their booking channel preference.”
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