Last week in Beijing I made the case for de-commoditizing the airlines. Even though it was a friendly audience at the CASMA Fall Global Conference, there was some sharp discussion during Q&A. Fair enough, as I skewered American’s handling of its Direct Connect value prop to the business travel community. Here are the key points:
Does Distribution Really Matter? Can it Differentiate Airline Products?
Absolutely. Think about how the endpoint of the distribution chain looks today. You still see flight times, carrier logos and prices. Pretty commodity-like stuff, that. From green screen GDS terminals to mobile booking displays, all you see is a long list of racked-and-stacked flight options.
It’s the equivalent of shopping in the paper towel aisle at WalMart. Price dominates.
It’s a simple formula. Google Flight Search + Airlines’ Hunger for Direct Connect = Trouble for GDSs.
You may think Google Flight Search is just another meta search tool. I think it is a major step in a campaign to build direct connections between airlines and travelers. Google Flight Search is GDS Bypass personified.
Google sees the GDSs as fortresses, producing hundreds of millions of captive airline searches beyond the reach of any search engine. Searches that need to be freed. Searches that should have the right to be completed directly with the supplier. Searches that in their basic form can be served up quite nicely with Google Flight Search.
Travel managers, watch this 2-minute video about the benefits of open API systems, and then ask yourself how it could – should – be applied to the travel industry:
To me, this video makes the point beautifully that open systems create unlimited opportunities. Closed systems, bounded by definition, can and do create value – but which type do you really want to bet on?
Let’s consider the case of direct connections (DC). As I told an audience last week, American Airlines has done an incredibly crappy job Continue reading →
Wouldn’t it be nice to have an easy way for updating your traveler profile? Regardless of which travel agencies, online sites or airlines you use? A place where any travel supplier could – with your permission – access your most current profile data and use it as needed?
Dot 1: Google is in a quandary. It needs to enter big markets with high growth opportunities. Dot 2: Google likes the travel industry. I’ve heard estimates that about 10% of its revenues are attributable to travel. Dot 3: There’s a big travel-related search market that Google hasn’t cracked. It sits behind the walls of the GDSs. Dot 4: ITA Software has deep expertise in airline pricing, shopping and availability searches. ITA powers Continue reading →