Coming Soon to a GDS Near You: Airline Merchandising
 |
The long-awaited technology standards designed to facilitate the sale of airlines’ ancillary services and other merchandising efforts through the GDSs are ready for implementation, and the development could bring “a new dynamic to agent-airline negotiations,” according to Robert Buckman, director of airline distribution strategy for Amadeus North America.
In a joint announcement with the three GDS companies, several traditional and online travel agencies expressed their support for the implementation of the standards and “common technology approaches for the merchandising of airline ancillary services.” They include American Express Business Travel, BCD Travel, Carlson Wagonlit Travel, Despegar, Expedia, Egencia, HRG, Opodo, Orbitz, Orbitz for Business, Travelocity, and Travelocity Business.
Technology standards define common terminology in messages sent from the systems of one trading partner to another. Companies that decide to do business together can adopt the standards to avoid having to reinvent the wheel every time they add a new partner.
British Airways, Delta Air Lines, LAN and WestJet also expressed support for the development.
The standards combine the Airline Tariff Publishing Co.’s optional services fare filing capabilities with soon-to-be-enabled electronic miscellaneous documents.
Will Agents Be Compensated?
The sale of ancillary services through GDSs raises several questions, not the least of which is whether agents would be compensated for handling those sales.
Buckman said the commercial model will be between agents and airlines. “We’re enabling the technology,” he said. “If there is any type of program for incentives or compensation, it will be between the agent and the airline. The agency that can see the opportunity and turn it into a positive outcome will be in an interesting position.”
Buckman added that agents are in a much better position to “up sell” the traveler than a website is because “they are trusted advisers to consumers.”
The True Cost of Trip
Corporations have clamored for a way to corral data about the ancillary services that their travelers are purchasing. They currently have little visibility into the true cost of a trip until long after it is over and the checked-bag fees, preferred seat assignments, in-flight Internet access and other items are tallied.
 |
Rose Stratford, senior vice president of global supplier relations for BCD Travel, said, “We applaud a standardized approach that will enable us to better serve our corporate travelers. It will offer us the opportunity to better manage our traveler needs while providing our clients with the transparency and reporting necessary to manage ancillary fees more efficiently.”
Michael Qualantone, vice president and general manager of global supplier relations for American Express Business Travel, said it is “critical that we have broad access to such supplier content that fully integrates into our downstream processes.”
A Question of Differentiation
 |
The impact of standards for merchandising is not without controversy. Jim Davidson, chief executive officer of Farelogix, said he is “highly supportive of management and settlement standards being developed around the merchandising process” and noted that his company has been on the forefront in developing the first ARC-certified EMD.
Farelogix merchandising solutions also fully support ATPCO fare filings if airlines opt to use them instead of alternative merchandising solutions in the market.
But Davidson said he is concerned about extending the “standards movement” to the actual airline product definition and sales process. “We believe this will impose unreasonable restrictions on what a travel supplier can offer, how it is priced, when and to whom it is offered, and how it is presented,” he said.
“Put another way: the choice of how a travel supplier wants to differentiate its product and how its customers want to buy the products should be a two-way collaboration, not a dictated process by the distribution medium.”
Buckman, however, said standards will support innovation, enabling airlines to bring new products to the agency market more quickly.
