23 March 2010

ARC Blasts CASMA and Issues Challenge

At the CASMA conference this week in sunny Quebec (actually there is still snow on the ground), Mike Premo of ARC laid down the gauntlet. The organization needs to get a life. It also needs to get behind the needs of the airlines and adopt a very proactive stance on the subject of Ancillary Revenues.

He pointed out a number of home truths that the organization needs to take to heart. But while this might easily be the pre-eminent take away from his speech – the important underlying message of his speech was that the whole travel industry needs to provide infrastructure of ancillary revenue.

Clearly there has been a lot of posturing in recent months on the topic. But the core issue is that the distribution channels – led by the legacy GDSs are not moving fast enough to meet the needs of the airlines. Earlier this week Amadeus (as reported in Travel Weekly Australia) laid out a timeframe of when they will support Ancillary Revenues "bookable via agent desktops within three years". Well get with the program people! – this is not going to be fast enough. In 3 year’s time the airline business cycle will be back at the top and looking at a coming down turn.

Having spent considerable time with airlines and their PSS vendors – I believe this “dog in the manger” attitude of the traditional GDSs is doing a major disservice to their paymasters. The stalling has to stop and the GDSs need to suck it up and deliver the capability of selling ancillary revenues via merchandising soon or face the consequences. Surprisingly at least one public event middle management representatives of the 3 legacy GDSs tried to outdo themselves in how their companies are hard at work on AR and as clearly stated by one of them – they will deliver their platform “by the end of the year” (eh hmm that was in 2009).

Mike knows that he can support the sale of ancillary revenues via the agency channel. He is clearly losing his patience. And he is not the only one.


1 comment:

Professor Sabena said...

A couple of you have asked me for the link - I am afraid I could not find it but here is the entire article - it was forwarded to me:

Justin Wastnage (c) TW Oz
All airline extras will become bookable via agent desktops within three years as the industry moves towards
charging for components of f lights, travel technology firm Amadeus has said.
Rudy Daniello, director
of product management
distribution for Amadeus
said that the trend of airlines
“un-bundling” their offering
and charging for extras
has been experimented via
direct sales websites, but
has only just started to reach
global distribution system
(GDS) screens. The firm’s
MasterPricer product for agents
will start to include these
ancillary products, such as
extra legroom, priority boarding
and pre-paid meals, from later
this year.
A focus on ancillary services
via travel agents has emerged
as airlines realise consultants
have the ability to explain the
benefits of the products better
than a web page, he said. “We
have a unique proposition to
cover a majority of questions,”
Daniello said.
However, Daniello conceded
that some “complexity” existed
in payment processing between
customers, agents and airlines,
chief ly when passengers are
reaccommodated on different
aircraft or change f lights, where
purchased ancillary services
may not be available.
Also, some airlines want to
retain the add-on purchasing
database rather than allow the
GDS to access. But Daniello
expects these problems to be
resolved “within three years” as
technology evolves and airlines
get on board.