The ineluctable middlemen | The Economist - 0 views
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By contrast, other bits of the travel business that depend on the airlines—such as aircraft-makers, travel agents, airports,
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and maintenance firms—have done very nicely.
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caterers
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a fancy name for computerised-reservations
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services.
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Most flights booked through a physical or online travel agent go through a GDS, which charges the airline a fee of about $12 per round trip, passing a few dollars of that to the travel agent.
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he loss of direct commission from airlines made travel agents more beholden to the GDSs, which not only slip them a share of fees but also provide their back-office computing
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Despite airlines’ efforts to make travellers bypass agents and come to their own websites, less than half of flights are booked this way.
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In recent years the main hope for restoring airline profitability has been ancillaries: all those extra charges for meals, checked bags, less-cramped seats and the like.
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“new distribution capability”
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One of its main elements will be a common technical standard for direct-connect services
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t would be hugely expensive for any new entrant to replicate the existing GDSs’ heavy spending on technology: the need for such investment makes flight distribution a business that naturally tends towards an oligopoly, he reckons.
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two of America’s big carriers have taken GDSs to court over the tactics they use to
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maintain their hold over travel agents.
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Both sides can claim to be the consumer’s champion. The airlines argue that the cost of the middlemen adds to the price of tickets (though the superficial evidence suggests that it is airline shareholders who suffer). They say they want to reform the distribution system to offer flyers a wider choice and a more individually tailored service. The GDSs argue that they provide travellers, through their agents, with impartial comparisons of all available flights, allowing them to get the best value.
