Air companies and GDS, is the business model changing ?

Escrito el 17 mayo 2007 por Antonio López de Avila en Transporte Aéreo, Travel 2.0

2005, Sabre’s Richard Adams told an audience at WTM that the European Union had included plans for total GDS deregulation. The so-called ‘third package’ of EU air transport liberalisation has been under revision since then. The European Commission is considering the next steps in its review of the European Code of Conduct for Computerized Reservations Systems: to change or completely phase out rules governing GDS activities in Europe.

2007, while the European Commission has identified ‘serious concerns’ about the competition implications for UK travel agents of Galileo’s proposed takeover of Worldspan, since that combined Galileo/Worldspan business would have a market share ‘of between 40-70%’ in the UK, Belgium, Hungary, Ireland, Italy and the Netherlands, in terms of travel agent services, Amadeus has a market share of 90% of the Spanish market and the EC is also considering if the stake of three major airlines in Amadeus constitutes control.

British Airways has imposed new fees to Amadeus UK agents (£3 per segment surcharge)and has signed new agreements with Galileo, Worldspan and Sabre in order to reduce the airline’s distribution costs and ensures the lowest fares to all travel agents, Tiffany Hall, British Airways head of marketing and distribution, said.

Should GDS change their business model? Should they get a percentage based fee instead of a fixed one, since the average cost of the segment is less? Are air companies being unfair with GDS although they still really need their services to survive? Should they both reconsider the whole thing and being more flexible?

Institute of Travel Management executive director Paul Tilstone, said last February that «if airlines work in tandem with GDSs, TMCs and buyers to evolve the model to ensure transparency, at least buyers can make the decision to either pay a higher fee for fully assisted managed programs through the GDS and the TMC, or they can work outside the program on a total spot-buy basis and take data collection for the purpose of traveler tracking, etc., in-house during the authorization process». (see more…)

Who pays who for what? What should we expect in the near future? Should we be prepared for a very different scenario in short-term?


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