What is going on with the airlines and online travel sites

Find out the issues behind the current debate of airlines, global distribution systems, direct connect, online travel sites

Category:

Film & Animation

Tags:

• GDS

[tkruijssen1]

"it's confusing" is meant to be a metaphor for "it's unnecessarily complicated" (due to the history and for commercial/agreement reasons). E.g., the answer to the question of why airlines don't pay the GDSs less and instead pay the agencies directly is "confusing"/unnecessarily complicated. Part of the reason is that some GDS contracts don't allow airlines to do this. It's tricky to explain all that in a little 4 min video. Don't you love what the Xtranormal video people have done though?!

[tkruijssen1]

....Also, GDSs have raised their segment fees to the airlines to very high levels over the years and 'kick back' part of the fee to the travel agency in order to preserve their market position vis-a-vis the other GDSs. If you had an airline (maybe you do) then you would probably be upset about this and demand lower fees so you can do the 'kicking back' yourself. So the airlines never really stopped paying the travel agencies and are currently implementing new payment/incentive models.

[tkruijssen1]

I think you are right but I have some comments. Rather than trying to kill the GDSs the airlines are trying to get them to change their technology so the airlines are more able to market and control their product as they are doing on their websites with things like traveler authenticated shopping (- knowing who the traveler is when they are shopping)....

[webguyz1]

It's all about brand. Those that have it avoid price wars at all costs, AND since their fares are actually lower most of the time, it makes no sense to pay 3rd parties publish your rates, which is exactly why I dont shop on OTA's for short direct flights (extended flights is another story).

[greersome]

I found this to be a pretty weak video. At the end of the day, AA and Delta don't want to be on OTAs because their prices end up being listed next to cheaper competitors and they lose revenue. When travelers are forced to go to AA.com instead of Orbitz or Expedia, they don't see the competitors' rates. The customer has to work harder to make an informed decision.

[benjudydotcom]

I lost count of how many times this video says, "it's confusing." I was hoping to learn something. I didn't learn much. If you're going to make a video about a complicated commercial process, you should probably be prepared to contribute more than "it's complicated."

[benjudydotcom]

I lost count of how many times this video says, "it's confusing." I was hoping to learn something. I didn't learn much. If you're going to make a video about a complicated commercial process, you should probably be prepared to contribute more than "it's complicated."

[joelfrpaula]

Its ironic that the AirCos created the GDSs, designed the business model to be able to outsource the huge cost of handling the reservations globally, then sold them for profit and are now trying to kill them.

[joelfrpaula]

Strange? Well... The Airlines could start paying comissions to the OTAs and Travel Agents... And control the sales channel. But that has its own costs.

Furthermore, the GDSs are also doing a big part of the job for the AirCo by handling the reservation process for them, handling a massive amount of information transactions.

[joelfrpaula]

This is even more confusing:

Why have the airlines stopped paying the travel agents? Don't they deserve some payment if they are a sales channel who add value to the distribution chain?

he GDS's have been supplying technology to travel agents for years. One of the main financing for the OTAs is the GDS money. This is not bad for the end customer. This 7 billion USD are split amongst all the player in the value chain. Via the GDS.