Just when we all thought the new year is bringing in more relief and joy to the travel industry, more people are flying, load factors are improving and a general optimism was is in the air, at least for Q4 of 2010; the American Airlines(AA) – Online Travel Agency (OTA) – Global Distribution System (GDS) tussle, now turned war kept us industry folks busy. Yes, busy and how! As if the chaos of the future of online travel, meta-search engines and emerging new mobile technologies gaining more prominence wasn’t adequate.
That said, enough has been written, debated, argued about American Airline’s Direct Connect strategy by stalwarts of the travel industry, technology and ancillary industries, research and trade pundits. We all have been keenly watching this unfold layer by layer. AA has been brazen enough to go the Direct Connect way to reduce distribution costs. OTAs Orbitz and Expedia are miffed, Sabre has announced that it would be terminating its distribution contract with AA and Amadeus is subdued and quietly monitoring the going-ons. AA has apparently sued Sabre for increasing booking fees and fare display preferences.
The Open AXIS Group, an organization that has set Airline XML integration standards and promotes XML as the new electronic messaging structure has commented on the recent distribution actions and called for an open industry dialogue in a press conference recently. Results of this are yet to be known.
Open Travel Alliance is soon going to voice their thoughts and we may see some more twists in this drama. Meanwhile, travel technology vendors that provide support in the integration of XML APIs (used in the direct connect type model) are possibly optimistic, but a lot remains to be seen on whether other carriers seek their technical expertise to follow the AA path.
Let’s not forget, the Interactive Travel Services Association whose members include the major GDSs and US-based online travel agencies are on the look out to include global players to partner with. Once this gains momentum, be prepared for more resistance and perhaps change as well. On another track, in a move to bring about product differentiation and drive more traffic to their own website; Delta Airlines removed its flight information from One Travel, Cheap Air, Vegas, CheapOair, BookIt, AirGorilla and Globester.
What do these new developments mean for the key folks in the travel fraternity?
I’m wondering if this will influence any or all of our big players in the Indian travel industry and the Online Travel market. Will any of our scheduled airlines like Air India, Jet Airways, Kingfisher etc. emulate AA, or will the GDS continue to be their distribution partner?
Now, have we thought about ourselves in this entire mix? What are our next steps as an IT Services company with a significant footprint in Travel and transportation technology maze?