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Deborah Fromer

IATA Chief Cites GDS Partner Role, But Remains Critical - 0 views

www.travelmarketreport.com/technology

IATA; chief partner ; GDS; XML; Open AXIS; Farelogix; American Airlines

shared by Deborah Fromer on 16 Jul 12 - No Cached
  • While remaining critical of GDSs, IATA director general Tony Tyler sounded a somewhat less combative tone toward “our global distribution system partners” during his keynote speech at the IATA annual general meeting in Beijing.
  • Giovanni Bisignani, who retired as director general last year after 10 years in the post, made the GDS industry a frequent target of his famous “Basta!” moments over segment fees.
  • More recently, Tyler has excoriated GDS companies for what he called a failure to meet the changing needs of airlines as they adopt new merchandising methods.
  • ...8 more annotations...
  • Our global distribution system partners help us to sell 60% of our tickets,” he said. “Beginning four decades ago, when these systems were created, their cutting-edge technology expanded our distribution horizons.”
  • But are blocking innovation
  • Open AXIS messages were in turn donated by Farelogix, the company that developed American Airlines’ Direct Connect technology.
  • GDSs, which are built on operating systems dating from the 1970s, have not been able to facilitate innovation like we have seen in other industries.”
  • multimillion dollar airline product investments “cannot break free of product descriptions limited to booking classes like F, C, or Y and their derivatives. And personalized offers based on availability, customer needs, preferences or histories are effectively impractical.”
  • IATA is working on new distribution standards to enable airline product differentiation, he said. Those standards are based on XML messaging schema adopted as “standard” by Open AXIS, the U.S. organization that promotes XML as the ideal technology connection linking airlines with distributors.
  • “XML standards and customer-friendly interfaces are the new cutting edge, facilitating revolutions in how the world does business.
  • IATA will define the foundation standard this year
  • Deborah Fromer on 16 Jul 12
     
    The International Air Transport Associate (IATA) at their annual general meeting in Beijing have had enough with the outdated Global Distribution Systems technology. The new Director General Tony Tyler indicated that in the 70's the system was cutting edge technology expanding distribution for airlines but years later the technology lacks innovation and must be brought up to date with airline product differentiation. This can be done by adopting new standards through XML messaging schema. Farelogix has donated XML through Open Axis, an organization that promotes the XML technology for linking airlines with distributors, similar to the technology that American Airlines has been using. IATA indicates that this year they will define the foundation standards in partnership with the GDSs, a necessary progression.
rroll027

GDS travel-booking model faces change | Nicholas Kralev - 0 views

nicholaskralev.com/...vel-booking-model-faces-change

shared by rroll027 on 23 Jan 20 - No Cached
  • American was on Sabre and United on Apollo, which is now part of Traveport. That means that the respective GDS hosts the airline’s data and controls its content, delivery, display, and most of its sales. The airline gives the GDS its data in parts, but it’s the GDS that in effect manufactures the airline’s product.
  • In the meantime, technology companies like Farelogix and Datalex were hard at work trying to build channels through which airlines could distribute and sell their products directly to buyers — a capability that would free them from the grip of their GDS and significantly reduce costs.
  • However, that’s not where the majority of airline tickets are sold. According to Farelogix, about 60 percent of the roughly 1 billion tickets issued worldwide each year are sold through indirect channels, and virtually all of them use a GDS
  • ...6 more annotations...
  • The average GDS fee paid by the airlines is about $12 per ticket, or more than $7 billion a year in distribution costs, Davidson said. In contrast, Farelogix’s “Direct Connect” offers a carrier the opportunity to spend only between $2 and $3 per ticket, saving about 80 percent of the current costs.
  • The biggest irony in this saga so far has been the January announcement by Sabre, the GDS American created more than four decades
  • ago and the h
  • st of its data until recently, that it intended to drop American data from its offering later in the year. Litigation followed, but later the two companies agreed to cool it off and negotiate.
  • Why are the GDS companies resisting the direct model? Obviously, because they would lose billions of dollars in revenues. In fact, “Direct Connect” can be easily integrated into a GDS, Davidson said, with some airlines taking advantage of all current GDS functionalities, and others using only the ones they need. Not only have the GDS companies rejected that, but they have began penalizing travel agencies and other providers that use dire
  • channels in addition to their GDS. In turn, American has started imposing fees on GDS bookings.
  • rroll027 on 23 Jan 20
     
    American Airlines embarked upon direct booking to cut costs to GDS and was found itself facing legal consequences. This reflected the continuous fierce competition in the travel industry and the lucrativeness of the GDS.
jessielee214

Travel Data Collective - 0 views

traveldatacollective.com/...ew-distribution-capability-ndc

shared by jessielee214 on 11 Sep 20 - No Cached
  • What is New Distribution Capability (NDC)?
  • NDC aims to transform the airline industry by addressing the current limitations in distribution
  • What is NDC?
  • ...30 more annotations...
  • New Distribution Capability (NDC) is a new technology created by IATA to streamline the airline distribution process.
  • It's an XML-based communication standard originally developed by Farelogix in 2010 to create direct connections between airlines and third party distributors.
  • This was standardized in 2012 by IATA to replace the old EDIFACT messaging standard, which global distribution systems (GDSs) rely on.
  • NDC was orginally created as a way to bypass the GDS providers, but slowly these providers have become more involved in the process. The basic idea is that NDC is supposed to give indirect distribution channels, such as GDS and metasearch, the same capabilities as an airline’s website.
  • Who's Involved in NDC?
  • There are several different players involved in the NDC process: travel agents, airlines, aggregators and IT providers.
  • Travel agents and airlines are straightforward. The aggregators are the different intermediaries involved in communicating the travel agent's request to different airlines.
  • IT providers are responsible for integrating NDC into the airline’s IT infrastructure.
  • The integration layer method is less complicated, and companies such as Openjaw, Farelogix, and Paxport have created solutions by sitting above the airline’s PSS.
  • third party distribution process works as follows when a traveler needs to reach their destination at a certain time and price:
  • The traveler goes to their travel agent who then queries the GDS system.The GDS pulls information about schedules and fares from a third party. The GDS builds the offer, then goes to the airline to get information about availability. When the offer is available, the information is relayed back to the travel agent and passenger who can then see the airline, price and schedule.
  • In a complete NDC solution, the process goes like this:
  • A travel agent will create a shopping request which will be sent to an aggregator. The aggregator will then create an offer request to be sent out directly to airlines. The airlines will then determine a product that fits the offer.
  • The product is sent back to the travel agent through the aggregator and the offer will "evaporate" after a certain amount of time.
  • According to IATA, this process will eliminate confusion over what's included in the offer. It will also be able to simplify the airline ticketing process.
  • How Can NDC Be Implemented?
  • wo recommended ways
  • One is by integrating directly to the airline passenger service system (PSS), the other is an integration layer outside of the PSS.
  • Third Party Distribution Today and Under NDC
  • In order to set up a full NDC suite, airlines have to create an offer and order management system, which will interact with the PSS.
  • How is NDC Being Used Today?
  • There are currently 62 airlines who are either NDC Certified or XML-capable.
  • NDC connections mostly use it in limited cases, and not to its full potential. United has partnered with Amadeus to have an NDC connection to their GDS for selling their economy plus product.
  • Many airlines are piloting these simple types of connections through NDC (instead of developing their own direct connection) as it will be easier to increase the scope with other distribution providers.
  • Other carriers such as GOL are using NDC connections for offer and order management, providing ability to purchase seats, bags, upgrades, meals, car rentals, and travel insurance, as well as ability to bundle the products (this is being done with Navitaire as their IT provider).
  • What's the Future Outlook for NDC?
  • In the future, there are hopes that NDC will be able to connect to chatbots, allow purchasing and upsell through things such as Amazon and Alexa.
  • Part of the challenge is getting airlines, travel agencies and GDSs to spend money on the infrastructure needed to implement NDC.
  • Airlines are hoping that by using NDC connections either through GDS or directly to travel agents/metasearch they will be able to pull in additional revenue for each ticket sold
  • Some airlines such as Lufthansa, IAG (British Airways, Iberia, Aer Lingus), Meridiana, and Ukraine International Airways are introducing fees for tickets booked through GDS, however the fees are waived for tickets booked through NDC connections.
  • jessielee214 on 11 Sep 20
     
    The article talks deeply in NDC from the past to now and is very clear about how it works. NDC can help airlines to know the need for customs and without the commission. I think one day, NDC can instead of GDS, but it still needs to take such a long time.
anonymous

Future of Global Distribution for Airline Travel - 1 views

tourism.about.com/...ionSystemsforAirlineTravel.htm

shared by anonymous on 09 Feb 12 - No Cached
  • Imagine if every airline used a separate reservation system to distribute flight information, instead of the familiar global distribution systems (GDS) in place now
  • 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.
  • 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.
  • ...10 more annotations...
  • 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.
  • 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.
  • They suggest it will make ancillary fees, such as priority seat and meal fees easier to track for business travel.
  • 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.
  • 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.
  • 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.
  • The contracts for the global distribution systems, Worldspan and Sabre, will be up for renewal soon this year. What will happen with American flights and air fares 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.
  • 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.
  • 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.
  • 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.
  • Marcia Brown-Kelly on 09 Feb 12
     
    It appears that American Airline is about to remove itself from the tradition global distribution system and introduce its own distribution system. American Airlines is advocating for distribution companies to utilize AA direct connect which is a direct link into AA's host reservations system. Currently American Airlines fares are no longer available on Expedia or Orbitz sites. This is because no contractual agreement was reached for the distribution of AA products. Travel professionals are waiting to see the result of this bold move by American as this has great implication for the future of airline distribution systems. If American Airlines pulls away from the mainstream GDS, consumers and travel specialist alike will be faced with the inconvenience of going to a separate reservations system to compare fares. Although travel professionals are now urged to use direct connect on a trial basis, the general feeling is that eventually they will be charged to sell American Airline flights. To defend this move American Airline is only saying that direct connect will make it easier for them to tract ancillary fees like priority seating. It was noted in the article that Southwest Airline for the most part is a stand alone reservations system but they do not negotiate with the GDS companies to sell their flights. It is therefore quite evident that this move by American is really to reduce expenditure by eliminating the middle GDS companies while increasing revenue by charging travel partners for utilizing direct connect. American Airlines clearly wants to globally control their distribution system and maximize revenues. Contract renewal for both world span and sabre are due and the experts are waiting to see if American will renew with them. Sabre is owned by American Airlines so its a wait and see game to see how all this will be panned out. The real problem for the consumers and travel specialists are that if other airlines are to follow this move by American the tra
  • ...2 more comments...
  • Rixon campbell on 03 Sep 12
     
    Global distribution systems (GDS) are used within the travel industry for the booking of flights a service that was once performed by travel agents. With the introduction of GDS many jobs were loss. Because GDS are contracted services with World- span and Sabre renewal and renegotiation of contracts may pose a problem. There are many pros and cons to the GDS for consumers such as booking of flights anytime and the loss of personal relations with the travel agents. According to Bonnie Burgess, the renewal of the GDS with world-span and Sabre is eminent which might create a problem for consumes if the negotiation falls apart. There was a similar situation Direct TV and the provider of many channels to Direct TV when they could not come an agreement, and, in the final analysis the consumers were the ones who suffered. Southwest and American airlines are two airlines who defended why they felt that booking directly at the website is the best options for travelers. The conclusion, is that there are advantages and disadvantages to the GDS. one of the overarching disadvantage is when there are difficulties with meeting of the minds in contractual negotiations.
  • Mariana Sales de Jesus on 15 Sep 12
     
    The article highlighted reports how hard would be for travel agents to work without and Global Distribution System due to difficulty to generate price comparison reports to customers. It is also mentioned that American Airlines Airfares are no longer posted to the two majot websites for price comparison (Expedia and Orbitz). American Airlines will be using another website called Direct Connect which will be complimentary on a trial basis. In order to have full access, customers or travel agents would have pay for a membership. The process will have a higher cost and will be more time consuming. Southwest Airlines is acting the same way. The intention is to avoid comparison and encourage direct booking with the airlines. This difficulties presented by hotels and airlines may require more usage of a travel agent to do research for consumers. GDS's contracts are up for renewal and the concern is whether or not airlines will get into an agreement where rates will still be posted on the system avoiding several searches in multiple sources.
  • mjbengo04 on 06 Sep 16
     
    This article explains the distribution route American Airlines is taking to sell their flights. Due to not seeing eye to eye with the two most probably used websites for travel, Expedia and Orbitz, American has now taken their products away from both airline distribution sites. American suggest that all travel agencies and distribution companies begin using Direct Connect, which is a system for only American Airlines flights. If this would happen, travel agencies and companies will then begin having to pay for the system in order to sell Americans flights. At the moment you can still book flights through other distribution sites, but until when will that be? They already stopped Orbitz and Expedia, what's not to stop the others. The future of global distribution systems will be up in the air if all airlines choose to sell their own systems to be able to sell reservations. The only positive that was pointed out in this article was that if this system takes over, then more consumers will have to go back to using travel agents to secure the best reservations for flights and such.
  • anonymous on 18 Sep 16
     
    With the contracts for major global systems, Worldspan and Sabre, being up for renewal in the near future, this article analyses the possible outcomes for airlines, and alternatives should they choose not to forgo continuing use of GDS
msoma003

What Will Change in the Future of Global Distribution for Airline Travel? - 1 views

www.tripsavvy.com/ems-for-airline-travel-3252519

shared by msoma003 on 27 Jan 18 - No Cached
  • have to compare flight costs on every reservation website or call each airline separately
    • msoma003
      msoma003 on 27 Jan 18
       
      Not effective. Millennials will not spend the time searching multiple websites
  • American Airlines airfares can no longer be found on Expedia or Orbitz websites, or any site powered by Orbitz.
  • American suggests that distribution companies begin using Direct Connect, powered by Farelogix
  • ...8 more annotations...
  • Southwest Airlines are not available in most systems for booking reservations
  • They claim they have the lowest American Airlines prices guaranteed, and they have no online booking fees.
  • 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.
    • msoma003
      msoma003 on 27 Jan 18
       
      Is it really worth the extra fee? Each agent will need to examine the ROI
  • Southwest is self-contained and stands on their own, as far as distribution methods go.
    • msoma003
      msoma003 on 27 Jan 18
       
      This could help lower the cost paid to third party sites but also lowers company visibility.
  • 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
  • companies are able to offer comparison reports on travel expenses
  • 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.
    • msoma003
      msoma003 on 27 Jan 18
       
      This will be interesting because travel agencies have been on the decline due to advancements in technology.
  • msoma003 on 27 Jan 18
     
    The article discusses how American Arlines (AA) flights could not be found on Expedia or Orbitz because the company could not reach an agreement with Expedia. AA then suggested customers book flights directly via their website or via Direct Connect, a new system. Southwest airlines is another company that does not sell via third party or GDS sites, they only sell on their on site. When companies begin to remove themselves from traditional GDS systems it changes the way consumers and travel agents begin to book flights. It will make more difficult because we will spend more time comparing multiple sites and we we will never be sure if we are getting the best deal.
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