Change? Not in my backyard!

Change is good, according to the old adage. In practice, we only believe it when it happens to someone else.

Over the last couple of months, it has become clear that several major airlines, notably American, are looking to alter the way they distribute their products to corporate travelers. Given that there has been no substantial change in the way they do that since 1976, you might think they were due.

But travel management companies and corporations like things the way they are, with all the airline content they need in one place: the GDS. Well, it’s not really all in one place – there are always a few airlines that don’t participate, or they don’t participate fully, or they have a deal or two that isn’t available through the GDS – but that’s generally brushed aside in the general homage paid to “full content.”

And TMCs and their customers aren’t really totally happy with the way things are. It’s getting more and more difficult to determine the full cost of a trip, given that so many elements of a fare – checked bags, meals, even the darned blankets – have been “unbundled.” They want more clarity on how much it’s costing their travelers to fly.

So the airlines and a few third-party technology companies, notably Farelogix, have tried to address these issues by building more modern connections between airlines and TMCs that can transmit richer information. They say this will enable airlines to offer truly customized packages of services to customers that won’t just offer old services with price tags slapped on (like checked bags) but will offer new services that customers will be happy to pay for (like inflight Wi-Fi). New front ends for TMCs would re-aggregate the revered “full content.”

Some people in the industry think this is a great idea. Others do not.

ASTA’s Paul Ruden, senior vice president, legal and industry affairs, and Kevin Mitchell, chairman of the Business Travel Coalition, held a press conference today in which they called for the airlines to “develop and deploy merchandising capabilities within the existing technology framework of your distribution system partners and corporate customers.” This had me scratching my head. What if those capabilities don’t fit into that framework? Should the airline product be limited to what works only within a GDS’s capabilities? Isn’t the GDS the mechanism that distributes the product, sort of like the company that distributes grocery products on delivery trucks? Do we really ask companies to tailor their products to suit the delivery mechanism? If something doesn’t fit neatly on a distributor’s truck, don’t you go out and find someone who has a different truck?

An ASTA-BTC document also says: “If airlines get GDS services for free, then economists will tell you that you have created a classic free-rider problem in which the user of the services has no incentive to do so efficiently or economically because someone else bears the freight. The concept is simple. Anyone who consumes a service that is paid for by someone else has the inherent incentive to over-indulge. Airlines themselves recognize this in their business model, which is why they assess a hefty service fee every time consumers using all but the highest priced tickets make a change.” Hello? For years, airlines have paid segment fees to GDSs, which then pay incentives to travel agencies for “productivity.” Isn’t that a “classic free-rider problem”? (Not to mention, the concept of “airlines getting GDS services for free” sort of came out of nowhere.)

One of the more mystifying items in document co-authored by Ruden and Mitchell was this: “We continue to be baffled by the incessant and near-trancelike incantation of XML by Jim Davidson of Farelogix and others.” I have seen Jim in action on a number of occasions. Passionate, yes. Animated, definitely. “Near-trancelike” is not how I would describe him. This struck me as a bit of a personal put-down, and frankly, it has me baffled.

I don’t know which side of this debate is the right one, and I certainly can’t predict the outcome, but I think the rhetoric is getting a little weird. We are talking about technology, not religion. During the press conference, I asked what would happen if the airlines forged ahead with plans for new distribution methods. Mitchell responded that “the market would decide.”

Bingo.