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.

Cheers

1 comment:

  1. 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.

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