Agents Want Compensation for Selling Ancillary Air Products

This is the sixth and final piece in our series about airline GDS systems: where they’ve been and where they’re going. We started by looking at the need for an automated way to handle unbundled pricing (read article), covered a possible future solution, the electronic miscellaneous document, (read article), looked at how the industry evolved to where we are today (read article), how GDSs have responded to the airline merchandising craze (read article) and got a glimpse of how American and technology companies view the future (read article). Here, agents weigh in.

Travel agents still have a lot of questions about American Airlines’ direct-connect strategy, which aims to enable agents to sell the carrier’s ancillary products, such as inflight Internet access, lounge privileges and meals.

American wants to connect with major TMCs directly via XML and, with smaller companies, through third-party technology providers such as Farelogix, also via XML. And it has said it wants XML connections with GDSs, which would enable a flow of richer information. Sabre, in fact, already uses XML connections with some airlines to enable the display of seat maps or the sale of preferred seats.

Perhaps the most controversial element of American’s plans is its stated intention to sever the Edifact connection to the GDSs.

Other airlines are moving toward a direct-connect strategy as well but have been less vocal about it.

Meanwhile, some agents flatly refused to discuss their opinions of the plan, even off the record, saying it is “too sensitive.” They said they were concerned about the reaction of either the airline or their GDS vendors.

Others are intrigued by the possibilities of such a relationship but said they have too little information to form an opinion at this point.

Kathryn Sudeikis

Kathryn Sudeikis, vice president of corporate relations for All About Travel, in Mission, KS, and a former ASTA president, said she understands agents’ hesitation to endorse American’s plan.

“We’ve put our ladders up against certain walls with partners who have our interests at heart, and we’re skeptical of some of the talk,” she said.

On the other hand, if it ultimately would enable agents to offer competitive deals to their clients and incorporate ancillary products into an efficient workflow, she said: “Why wouldn’t you want to play in that arena?” But, she stressed, the plan needs to be explained better.

Joe McClure

Joe McClure, president of Montrose (Calif.) Travel, is one of the agents who received a briefing from American late last year.

“They laid out the vision and let us know who the connectivity partners were,” he said. “At that point, GDSs were not on the list, although American said it wanted them to be. The bottom line was that we would build the connection and we would have great content.”

The American representative told McClure that many details of how such a relationship between an agent and the carrier remained to be worked out. To date, McClure said, the questions linger.

American has since said that it does not plan to charge travel agencies for access to the content. Nevertheless, McClure said, other costs must be considered.

“The two big pieces are, No. 1, I’m going to have to pay to build the connection; No. 2, if it’s not integrated into the GDS, my agents will have to go to a secondary system,” he said. That could result in productivity issues as well as diminish the incentives paid by the GDS vendor. “So you expect us to incur costs while this cuts our revenue stream,” McClure said.

Farelogix has said that the basic package of SPRK, its travel agency platform currently in pilot, will be provided at no cost to the agent.

“But whenever you add another middleman, there are costs,” McClure said. “Nothing is free. Everyone has a poll tax.”

His “ideal scenario” is for the GDSs to incorporate ancillary products into the existing booking flow. “I don’t see where another third party would be the most efficient way to do this,” he said.

In addition, he thinks a revenue share would be only fair. “The airline should provide an incentive for me to book ancillary products. I want fair compensation that recognizes the value that I provide for my travel partners.”