One-On-One With Cory Garner: AA Details Distribution Plan
Following allegations that American Airlines intends to charge agencies for content, AA director of merchandising strategy Cory Garner spoke with BTN senior editor Jay Boehmer about the carrier's direct-connect strategy for selling ancillary services, its unhappiness with its global distribution deals and its plan not to charge users for content.
BTN: What do you say to industry claims that American intends to "flip the distribution system economic model from the airline funding unbundling, merchandising and selling to a 'user-pays' model"?
Cory Garner: Those are untrue comments. It is not part of our plan to charge travel agencies for content. That is not what the direct-connect initiative is about whatsoever. In travel agency discussions that have been referenced as the source of his information, there was no discussion of economics with respect to GDSs or agencies, but strictly a discussion about changes that are coming to handle the sale of optional services through travel agencies.
BTN: Is this related to American working with FareLogix, BookingBuilder and others to be the direct connect for optional services?
Garner: That's right. The message was pretty simple: We're going to be distributing our optional services display and selling capability to travel agencies using the direct connect exclusively, but travel agencies can access the direct connect from any technology provider. That includes GDSs, point-of-sale systems for call centers, corporate booking tools, mid-office systems that manage PNRs and back-office systems that facilitate reporting.
BTN: What does that mean for the GDSs?
Garner: Our desire is to continue distributing through GDSs. It's just that the direct connect gives travel agencies and us more options than just the GDS for distributing our content. For that reason, our direct connect has been billed as a GDS-bypass strategy, but it's only a GDS-bypass strategy if the GDSs and American can't come to any commercial arrangement for distribution of these services through the GDS via the direct connect.
BTN: Have agencies signed on to the direct connect?
Garner: We have travel agencies in production on the direct connect today for basic GDS-style technology for managing fare content. Optional services will come later. Our direct connect is in place in four continents. The number of agencies using it and the amount of volume going through is relatively small.
BTN: Your deals with major GDSs expire next year. What is your goal in those talks?
Garner: Our goal is to come to some mutually beneficial agreement with each GDS. It typically takes one to two years to negotiate to get to that solution. The good news is, on every GDS deal we've ever attempted to negotiate, we've come to a successful conclusion. It's a little bit late in the game to come to a commercial agreement with GDSs and have the GDSs tapped into our direct connect for optional services in time for our launch.
BTN: Have you considered extending to seven-year deals?
Garner: I don't think we're completely happy with the deals we're in right now, so I think the focus is renegotiating.