That optional airline services for the most part can be
neither booked nor tracked using established managed-travel channels is
"unacceptable" and "undermining corporate travel programs,"
according to a June report by the Institute of Travel & Meetings. As for
solutions, the British and Irish trade association advocated "the GDS
route" as the best option "for now."
ITM estimated that "non-base fare items"—including
ancillary fees and charges for fuel, payment and distribution—in the short and
medium term will raise total travel costs by 10.4 percent, according to the
report. "Businesses are losing sight of their travel spend and the
inability of travelers to complete their travel arrangements through the
managed process is encouraging them to switch to unmanaged channels," ITM
warned. "All this is happening at a time when compliance with managed
travel channels is more critical than ever for corporate strategies because of
the need not only to manage cost but also risk, most particularly traveler
security. The situation must be improved."
The report described "the GDS route" as including
ATPCo's Optional Services fare filing standards and the IATA Electronic
Miscellaneous Document for point-of-sale issuance and settlement. ITM
"encourages all stakeholders in the supply chain to get behind" this
model. Although ITM "has no objection in principle to distribution which does
not involve a GDS, either for base fares or ancillary items," the group
indicated that "despite several requests," American Airlines
"has yet to show ITM officials its Direct Connect process working in
practice ... so to us the airline's case is not proven."
The group suggested that corporate buyers "keep
talking" about this issue, negotiate ancillary spending when it can be
measured, contract for "mandatory filing of ancillary fees through
existing distribution processes," adjust travel policies to help
"manage demand and payment of ancillary fees," prepare for
distribution fees since "ultimately, more of the cost of distribution is
coming buyers' way," engage with travel management companies and
"pressure preferred suppliers for change."
Other comments included a recognition "that the supply
chain, especially the airlines, have concerns about the cost of GDS
distribution, and that some crucial negotiations between airlines and GDSs are
in play," but also an argument that corporate buyers "should not be held
to ransom by this financial confrontation. ... ITM is open to change but not if
it will involve workarounds that may lead to more cost and potentially more
errors through increased manual processing."
In the report, ITM contrasted American Airlines and Sabre
commentary on the former's Direct Connect program. "AA claims all the
following criticisms of its model are untrue: TMCs will no longer be able to
compare prices between airlines; AA will no longer distribute through GDSs;
aggregation other than through a GDS will be unreliable and inefficient; every
API created by a supplier creates significant extra work for aggregators and
TMCs; AA will not use EMDs."
According to ITM's citations of Sabre, "Only a handful
of North American airlines, most specifically AA, are challenging the GDS-based
ancillary fees solution; it would be impossible to integrate conventional fare
filings from other airlines with self-assembled packages from what Sabre
describes as AA's 'walled garden environment' without significant investment;
AA's Direct Connect strategy adds needless complexity and would require far
greater investment by TMCs, self-booking tools and other third-party technology
providers; this is not a technical issue—GDSs can offer the solutions AA is
looking for."
Written in May, the report indicated Sabre "had built a
significant proportion of its capability to offer a shopping, pricing, booking
and fulfillment facility, and expected to make this full solution available
from July 2011."
Source: The Beat