Imagine if every airline used a separate reservation system to distribute flight information, instead of the familiar global distribution systems (GDS) in place now. Individuals and travel professionals would have to compare flight costs on every reservation website or call each airline separately. This would make the price comparison procedure a time-consuming and defeating practice.
Global Distribution Systems
American Airlines airfares can no longer be found on Expedia or Orbitz websites, or any site powered by Orbitz. These are two of many airline distribution sites that consumers can compare and book flights they choose. Each did not come to an agreement with American Airlines for a new contract to distribute American Airlines' product.
American suggests that distribution companies begin using Direct Connect, powered by Farelogix. Travel professionals view this alternative concept as having to use a separate system for American Airlines reservations, possibly complimentary on a trial basis to the travel management company. Then travel companies would be charged to have the Direct Connect system, in the long run, thus paying for the opportunity to sell American flights.
American defends their program, saying that www.aa.com, is the best place to look for and book flights on American. They claim they have the lowest American Airlines prices guaranteed, and they have no online booking fees. They suggest it will make ancillary fees, such as priority seat and meal fees easier to track for business travel. They also add that flights can still be booked on other distribution sites, plus travel agencies around the world. But, for how long?
As travel professionals are aware, Southwest Airlines are not available in most systems for booking reservations. However, they do not negotiate with distribution companies to sell their product. For the most part, Southwest is self-contained and stands on their own, as far as distribution methods go.
The Future of GDS
What does this do to cost comparison for customers, therefore how does this affect airline travel for the future? Brent Blake, Co-President of All About Travel, Mission, KS, comments that "Direct Connect is a fragmentation of a currently very efficient process. In our opinion, Direct Connect will add costs to the process." If every airline decides to utilize a different system and charge for their product to be sold, then travel companies may have to forward their costs to travelers, hence driving up the price of airfares.
While the airlines are all in one distribution system, agencies and travel management companies are able to offer comparison reports on travel expenses for their business accounts. Booking reservations on several airline websites should make tracking airline prices and ancillary fees tough for businesses keeping a close watch on travel expenditures.
The contracts for the global distribution systems, Travelport and Sabre, will be up for renewal soon this year. What will happen with American flights and airfares in those systems? Will American not be offered in those systems as well, if an agreement cannot be made? What happens if other airlines decide to join with American? This may be the biggest travel industry news in the United States and beyond, since the deletion of travel agency commissions. There is also the possibility that more consumers will begin relying on travel agents to locate the best airfares.
This will remain to be seen.
Though this is a major obstacle for travel agencies and other travel management companies, travel agencies, being fearful of the outcome for consumers, are ready to stand their ground and protect themselves and consumers alike. The positions and dilemmas for airline distribution may be escalating soon.