ATPCO's Alex Zoghlin discusses:
- Making it easier to work with ATPCO
- ATPCO's role in airline industry recovery
- Future acquisition potential
When Alex Zoghlin first was asked whether he was interested in taking the leadership reins at ATPCO, "I actually laughed out loud," he said.
He certainly was familiar with the decades-old organization, having worked with ATPCO as one of the founders of Orbitz and later as the founder of G2 SwitchWorks, the provider of a direct connect between airlines and third-party distributors. His perception of ATPCO was as "very much a behind-the-scenes, quiet company that had been doing the same things for a long time."
As he looked at what ATPCO has been up to in recent years, however, the perception changed.
"The ATPCO that I knew from long ago is not the ATPCO that I met as I started to do more research," Zoghlin said. "It's really amazing how transformational the company has been over the last few years."
Zoghlin officially took over CEO duties at ATPCO on Jan. 1, following the retirement of president and CEO Rolf Purzer, who led that recent transformation. He spoke with BTN transportation editor Michael B. Baker about his plans to continue that trajectory. An edited transcript follows.
BTN: What are some of the accomplishments that changed your perception of ATPCO?
Alex Zoghlin: One example of what ATPCO was able to accomplish just [last] year that the old ATPCO could have never done would be right when Covid hit, the company came up with a whole set of [Universal Product Attributes], descriptions around the new Covid rules—do you need masks on airplanes, does this airplane block the middle seat. They built all of those UPAs, got 300 carriers to agree, and the [global distribution systems] and major distributors to modify and accept them in a matter of weeks. If you think about how long things take in this industry, especially in creating new standards, the speed at which the company operated was nothing short of amazing.
They did the same thing again when a bunch of tickets had been purchased under one set of rules, and then they relaxed those rules for exchanges and refunds and credit vouchers. When you start changing those core rules of tariffs and fare filings, those can be measured in years very often. Again, in a matter of weeks, they got all the major GDSs and the largest carriers all to agree on relaxing all the rules even for already purchased tickets in order to enable a completely different consumer experience. That to me is really a great indicator of a well-functioning organization that understands what its value is in the ecosystem where it works.
I think that the company is really well-positioned for the future in terms of how we can—as that middle man, that honest broker between distributors and suppliers and third parties—innovate, drive down friction and drive down cost and do it in a way that's in the best interest of the entire ecosystem. All of those things the companies did this year, they did at no cost. They didn't charge the airlines or the GDSs. They did it because we're an industry-owned entity that's here for the best interests of the industry, not necessarily for a profit motive. That gives us the flexibility to do the right thing rather than what is in the best interest of us as a company or one or two constituents.
BTN: Has that made you more aggressive as you set up your own goals for ATPCO?
Zoghlin: It has. One thing about ATPCO is that the core product that it provides the industry, which is the massive 250 million-plus fares database that we keep up and accurate and distributed globally, is incredibly complex. In order to be able to use it, you really have to know a lot about the airline business, which is a little bit of an issue for the company and frankly an issue for the industry. The barrier to entry to become a customer of ATPCO's core business is extraordinarily high. A big part of what we're going to do is not just look at new opportunities, which we are, but I believe there's a tremendous amount of opportunity in the products we already distribute for the industry today. The catch is that they're really hard to work with.
My joke before coming on board was you can work with ATPCO any way you want as long as you are willing to take the mainframe binary file it provides, and that company hasn't changed that model for a whole lot of years. There aren't a lot of other industries that still do it that way. In fact, I can't think of any. Think about if you wanted to use Google Maps in your product, and the first thing Google does is give you a binary dump of all their mapping data and said "Good luck!" That's essentially what ATPCO does in its core business.
When Rolf announced his retirement, I had an email from one of our GDS partners that said, "I see you're coming on board. We're super excited. We really want to look at how we work with you, because this file format you give us requires us to do a whole lot of work before we can make it usable in our infrastructure. We really want to simplify how we can get that done." So, you're going to see from ATPCO, we're going to try to simplify a lot of complexity that we've built up over the years and make it much easier to do business with us. You can connect to us via API, and we can provide you what you want. We can give you implementation references on how to use it, which most modern companies do.
There's a lot more opportunity in that core business for us to be a better partner in the industry as we go forward, and take that mentality to say, where can an industry-owned utility provide maximum value to the whole ecosystem? I think there is a whole lot of opportunity for us in this space, especially given where the market is today. It is not a great place, and as that player in the middle, we have a role to play in helping the industry hopefully come out better and stronger than it came in.
BTN: What will simplification mean for end users, like corporate travel buyers?
Zoghlin: One thing I've started to get a feel for in our product teams is that all entities in the travel ecosystem get paid by the travelers, so the better we understand those traveler needs, the better we can build our products that can help with those travel needs, and the better suited our intermediary partners—whether those are GDSs or [travel management companies] or [online travel agencies]—will be to manage those customer expectations. Expectations continue to get, especially from a technology perspective and digital-first perspective, higher and higher. You can click on a complex product from Amazon and have it delivered the next day, and those expectations are being carried over into all other verticals, including travel. Our ability to take some of our more complicated products and drive simplification for them is going to help everyone in the industry. Our travelers have expectations that those things are easy, even if the underlying technology and everything around it is very complex. We're trying to mask that complexity.
With the Routehappy acquisition, we have a significant amount more of metadata around the flights, beyond the tariffs and baggage fees. Does this plane have Wi-Fi? What does the seat pitch look like? Can I search for just upgradable fares? There's all these things consumers want to be able to do, but the data around them is complicated. ATPCO continues to have all that content and information, so TMCs and intermediaries and GDSs can provide new and innovative interfaces to their customers.
BTN: How are things progressing on the Next Generation Storefront initiative?
Zoghlin: We now manage a significant amount of data around all those displays and the other information around the product that's important to make decisions, which allows TMCs and corporate booking tools and GDSs to be more flexible. This is especially true on the corporate side. They may already have negotiated fares, but I may want a flight with a specific Wi-Fi carrier or that has the higher likelihood of an upgrade, and for carriers to start bundling those things together so you get upgradeability and exchange options within one fare filing. Things that are typically significantly more complicated and sold on an a la carte basis, you can start thinking about what those things look like [in the Next Generation Storefront]. In an ecosystem, what happens if every supplier and every distributor decides their definition of Wi-Fi is different? From a consumer perspective, that's very complicated and starts to get confusing.
The value of having a company like ATPCO is that it standardizes all those things, which is incredibly helpful for the traveler to make decisions. We create standards to drive down cost and friction for the industry and try and have a diverse set of companies that don't always like each other find common ground for the good of the industry. Unlike other standards organizations, we actually use what we build. These things aren't built in isolation.
BTN: What do you see as ATPCO's role in industry recovery?
Zoghlin: We can play a lot of roles. There are a whole lot of people, including me, that have canceled flights who now have credit. There will be a significant amount of rebooking activity going into the second half of the year. We're already preparing and working on ways in which we can help the industries and suppliers and GDS partners to simplify the way in which consumers can use those credits and other things and make it as seamless as possible. We've had a number of airlines that have contracted their route structure, and we've been working on products that allow them to much more rapidly put those things back into the market. All the manual labor that typically goes into a fare filing, that's one of the things we're working on to help the industry when travelers are ready and when Covid is better under control. We can really help get the industry back up and running.
BTN: The Routehappy acquisition was ATPCO's first in its long history. Could more acquisitions be a part of your strategy?
Zoghlin: Within the industry itself, we're constantly looking at how we can be more efficient, and there are a number of airline entities and some of them overlap—and we're working on figuring out how we can drive some of the efficiencies [from] that. I would not rule out another acquisition or so, but it has to meet some of that criteria of, is it something that the entire ecosystem, if it became centralized, would have a lot of value? Partners like Google and Sabre and Amadeus, would they see value in it, as well as the airlines, as well as others? If there are things where there is a common denominator, where it is helpful to everybody, it is likely you'll see us be more actively involved.
BTN: You most recently spent some time in the hotel industry. Is there anything from that industry you think can be instructive to the airline industry?
Zoghlin: There's a number of things. Because the hotel industry doesn't have an ATPCO, it looks more like [the New Distribution Capability standard] in a strange way, in which a number of the largest players come directly to the franchises and individual hotels and query them every time they search. Expedia and Booking [Holdings] and all the GDSs and other providers are all connecting, if not directly through a central reservation, at least to a cache of a central reservation system. And it actually works. It's more complicated, but it is possible, so there's been a common perception that you either do an NDC or ATPCO, and somehow those things are at odds. I don't see that.
You can have a common set—rack rate in the hotel business—and a specific response, and you can put those things together in a way that's valuable for the travelers, and you can make it work at scale. There have been some naysayers about NDC long-term and how you connect all of that, but I believe that ATPCO can help there. We already have all the publicly available content, and if you connected that with the NDC content, you have something that is better than what consumers have today. You can't go backwards and offer them something that's worse. It has to be better, or you don’t see widescale adoption.
The other interesting thing about the hotel side, significantly more of distribution happens direct than it does on the airline side. We look at the TMCs and corporate travel and group travel as direct, as partners of ours. They're not just intermediaries we have to pay commissions to. We see them as adding a valuable service to our mutual customers. I try to bring that mentality back as I think of ATPCO. There are functions that the travel sellers provide that when you route around them, the function and the need doesn't go away. If everybody booked everything direct on a carrier, somebody still has to keep that master record together and synchronize all of it. This is probably why you're seeing traction from GDSs on NDC.
I expect some of the startups in this space on the NDC-only side will realize that the travel sellers need more than a fare response. They need a solution to managing itineraries. So you're likely to see a number of those guys go upstream. This is exactly what a company like ATPCO was built for, continuously evolving. All of that is great for the travelers and the travel seller, because people will be fighting for their business.