20 November 2010

Is AA Just Posturing? I don't Think So.

I read in one of the Beat organs - that Mike Platt believed that AA and Travelport will ultimately settle.

According to a blog post by former managing director of HRG UK Mike Platt, GDSs "want to be sure that they preserve their near monopoly over unbiased content within the business travel sector, and they are prepared to pay to do so.

In my view they are not posturing and AA is determined to break the Gordian knott. But we have to consider that there are more than a single cost/price set of issues.

The GDSs have failed to keep up with distribution evolution and they have instead resorted to paying the market to keep quiet via the GDS incentive payments. As Mike correctly points out in his Blog - that is like a red rag to a bull. The airlines hate the incentive payments.

The GDSs on the other hand now seek to legitimize the payment of incentives to the agency community which is as simple as robbing Peter to pay Paul.

Making themselves out to be the heroes in all this - it seems that they have conveniently forgotten that they are the ones driving cost upwards.

There are several Airlines who clearly do not like the idea of Travelport forcing participation. What seems to have been lost in the noise is that GDS De-regulation has been in the market for several years and the behviour of the GDS has not changed for the better.

So the last question then... will AA roll over? Somehow I don't think so.

Thus we have an interesting fight on our hands. I know where I am putting my money


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