13 November 2009

The OpenGDS - A New Dawn

Reprinted with kind permission of The Beat:

The Beat ~ a travel business newsletter
New York City
11/9/09 2:32 PM

For many of us who have been involved in travel distribution, it has been an open secret that the global distribution system technology at the core of distribution was if not obsolete at the very least obsolescent--a case that has existed from at least the 1990s and, in my opinion, from before then. This was driven both by the business model of the legacy GDS as well as the strictures of the GDS core software based on IBM's venerable TPF [Transaction Processing Facility] operating system.

Over time, the pure TPF core was supplemented by auxiliary processors, Web front ends etc. IBM, too, started to move further and further away from its core business of application software and hardware to a more services-oriented model. In recent years we have seen IBM pull back from providing functionality common in TPF to being a pure operating system and coupled hardware provider. This caused many TPF users (not just airlines but banks as well) to migrate to more open systems such as Unix and Java-based programming for both cost and functionality reasons. There was considerable grumbling over the most recent upgrade to the Z class processors and the associated zTPF operating system product from IBM. The reason was that the "upgrade" created little or no additional capabilities for the user community.

The traditional GDSs were happy to pick up the development of new functions as they tried to differentiate themselves in the fiercely competitive market. Amadeus for one at its inception never included fares and pricing within the core TPF environment, and that gave them a certain flexibility in their fares products. Sabre had a heavy investment in DEC Vaxes (remember them!). So the move away from the holistic TPF based environment was an inevitable progression when the Web and its associated technologies came along.

Finally, we are beginning to see the results of these efforts in the GDS functionality. Last year Sabre in its briefing sessions on the new profile system outlined a vision of the open architecture which will see a flattening out of the capabilities of the GDS. Last week The Beat reported on what has been another open secret--that Travelport is doing the same thing with its now named Journey Manager and associated universal desktop and new profiles. Amadeus is likely not to be too far behind here.

I will not be presumptuous to describe how each player is now going down the path, but I believe it is now appropriate to state that the legacy GDSs are finally moving to what I call the Open GDS model--a novel concept when stated, but it becomes obvious when you reassess the world through open eyes. It is quite interesting to see how each of the major players is now clearly inching towards this concept and in some radically different ways. However, there are some common characteristics.

• New front end user interfaces/experiences and API/Web services for access
• Unbundled, open ports for supply access
• Advanced customer file management including PNR and Profile services
• New application frameworks

Coincidently, the emergence of credible GDS alternatives using software-as-a-service-based architecture (what used to be called "GNEs") are finally here and, more importantly, in production. Companies like Farelogix have become core to this shift to pry open the GDS model. This is now leveling the playing field with different supply players such as American Airlines, Emirates Airlines and Lufthansa--amongst others--taking legacy GDS Lite or Free approaches to both the commercial model and the technology. Other software providers such as Datalex and OpenJaw now are providing major functions that previously were the exclusive purvey of the legacy GDS world. In fares, too, we are seeing a next-generation of players independent from the GDSs, such as ITA Software and the Microsoft-Worldspan jointly developed ePricing capability.

I would be remiss if I didn't also state that the large online travel agencies have had all this capability for quite some time. So, the ability of an OTA to connect directly to the supply chain and in effect support their own versions of the Open GDS is really already in place. Orbitz before its acquisition by Cendant had already deployed its direct marketplace solution. The OTAs' white-label booking engines are clear examples of this.

While much of this is not new, it is clearly not a revolution but an evolution of the GDS model. And it comes none too soon. However, there are benefits and challenges that come along with this new world order.

The Open GDS model shows that responsibilities for distribution are now more evenly matched at different ends of the value chain. We will now see differing models emerge commercially to match this new open environment. The one-size-fits-everything model is, as I have written before, now clearly on the way out and the coffin has several nails in it already. The Open GDS model is a natural, and in my opinion unavoidable, result of fragmented content. I want to make clear that this was not a chicken and egg story. Fragmented content was always there. The GDSs just didn’t like to accept that fact.

Both ends of the distribution value chain now need to recognize that there are new realities. The suppliers now need to adopt better tools for distribution management, a role that used to be exclusively the domain of the legacy GDSs. Now no more. For the intermediaries and sellers of travel products, multi-source supply is not a nice-to-have but a must have, and in most parts of the world already a fact of life. New systems to support a more bilateral versus multilateral model of supplier relationships must be implemented, and quickly. This cannot be just a bolt-on capability; it must be at the core of the intermediaries' capability.

For the traditional GDS companies in the middle, these are new challenges--not least of which is how to demonstrate that their value remains consistent to suppliers and sellers alike. It would seem that the legacy GDSs are getting poked and prodded from all sides and seemingly all at once. They have fought a good battle, but now it's time to stop the rear-guard action and welcome the 21st Century. The next round of GDS/airline PCA (participating carrier agreement) negotiations will change the commercial landscape of the distribution market. The world will be a very different place in 2013, when the re-contracting season will come to an end. That season is now upon us and the battle lines are drawn.

Welcome to the new dawn. Welcome to the age of the Open GDS.

Travelport First To Cut Deal with BA

Far from its one time part owner Travelport (Galileo and Worldspan) has now concluded a deal with BA.

The deal extends the current opt in/opt out arrangement for significantly less than the regular Legacy GDS segment fee.

It should be noted that in the UK Home market - the moving of content out of GDSs by BA has been under way for some time with the Lime Management.

We can expect to see more content moved out of the legacy GDSs to systems such as Lime over time.

FYI The Agency pays for the Lime service a rather hefty ticketing fee.


BA-IB Agreed - Now The Fun Begins

As the details emerge of the deal - it has been agreed - the regulatory fun begins.

The Professor understands the deal will be very similar in appearance (to the customer) as the AF/KL with the retention of brands and coordinated activity. However since AF/KL was a takeover - the process of protracted approvals will be long and complicated.

It is not quite a merger of equals. I believe it is a 55%45% split in favor of the former British Carrier.

However the harmonization of rules particularly union contracts will take years to accomplish. Regulatory approval is another matter with the 4 way atlantic alliance still not agreed. BA will have to give up some slots at LHR and IB some at MAD.

With no viable local Spanish Carrier (Air Europa perhaps) able to pick these up in MAD then it becomes a little harder to work out. Virgin is of course going to make a lot of noise about things at LHR.

So let the fun begin!


09 November 2009

Shock Horror- AZ Makes Profit!

Say it can't be so... but it is.

AZ made Euro 15 Million in the last quarter. A good deal better than last year at this time when it lost a boat load of cash.

All the metrics look good. Load factors and progressions since the first of the year.

So perhaps Alitalia might be a phoenix in rising... just like its southern neighbour Olympic.


08 November 2009

Outted in DE, Available at WTM and PCW

Oh dear!
The Professor has been publicly outted in a German trade magazine - FVW.

So now my terrible dark secret is out in the public domain. Not that it was hidden that well anyway! A simple Google search will suffice.

With that having happened - I will be traveling for the next few weeks. Next week at World Travel Mart in London, I shall be there on Wednesday and Thursday. I shall be roaming the halls.

The following week - I am at PhocusWright in MCO - you will find me somewhere amongst the blogger group. Plus propping up a bar or two. Since I cannot afford the outrageous prices at the Omni - I am staying with a VERY select group at the HI Express. We will be having a great time there I can assure you the walls will be rocking!

if you wish to meet up - let me know. my email as always is ProfessorSabena@gmail.com.


Stupid Airline Web Tricks

Since its the weekend it is time for my (occasional) round up of stupid airline tricks - this weeks focus is airline behavior on their websites.

My candidates this week are members of the SkyTeam family. So listen up Delta and Air France - this applies to you. Equal billing BTW for one of the awards goes to Amadeus.

This week's award for "making things unnecessarily complicated and making me annoyed" goes to Delta for the formal inclusion of the name in the sign in process. With due deference to DL - they may have been required to do this for some arcane reason but since no other major airline makes me do that - I am surprised. it is an unnecessary annoyance. So now every time I use Delta.com - I have to go through this annoying extra step.

Thank you the World's largest airline for making me do things that are really unnecessary and constantly reminding me of this fact every time I use your website.

The second award goes jointly to Amadeus and Air France's subsidiary CityJet. The award for "completely inane form of bilingual user experience because I am too lazy to ask the customer what is his preferred language and because I am telling him what to do" goes to these two Air France subsidiaries. (Amadeus still counts Air France as a parent with airline's 23.14% Shareholding in the GDS giant).

It is so pervasive throughout the booking ticketing and itinerary process that I am just flabbergasted at the extent of the nature of the problem.

By now AF as a global airline should be able to have its subsidiaries support a reasonably decent customer experience. But no ... here is one of the transgressions I have encountered - there are so many!

I am flying from one English Speaking Country to Another. So why show me the information in French at the top in bold vs English at the bottom in light type!!!
The translations themselves are appalling. Some of the worst Franglais I have seen.

The Award goes jointly to Amadeus and Air France/CityJet because the engine is an Amadeus one and it lets you know throughout the process that it is Amadeus powering the transaction. So they get equal billing on this one.

Enjoy the rest of the weekend. And Airline Webmasters (are you still called that) I shall be watching you...