Virgin's V Australia sets up Independent Travel Agency Clearing

The wheels of the IATA BSP machine clearly rolled too slowly for Virgin Blue's new long haul subsidiary V Australia. So rather than sit on their behinds - those sassy Aussies decided to set up their own facility in Australia where most of their revenue will originate for the early flights.

The new VSP - V Australia Settlement Plan will be available almost immediately. Given the strength of Virgin Blue's brands in the market: Virgin Blue, Pacific Blue, V Australia and the proposed joint venture with Air Asia and you have to wonder whethr this is the writing on the wall for the BSP facility in Australia.

This is a good issue to examine. The direct costs of BSP have for a long time been rather small. However both ARC and the variou BSP's have raised charges to a point where not just the direct costs but the total cost of maintaining a BSP facility becomes less attractive. Indeed we have seen airlines like LCC Spirit in the USA exit all together. In the age of Google Checkout and eBay's Paypal, you have to ask what value does this form of financial fulfilment bring?

I firmly believe that an airline should be looking hard at the cost of BSP/ARC infrastructure if it is to reduce total costs. Remember chaps its not about cost cutting it is about simplification and cost removal. Perhaps IATA should consider some of its own medicine in "Simplifying the Business".

Cheers

Spirit withdraws from ARC. Is this another nail in the coffin?

ARC is no longer the holistic nutral ticketing solution it once thought it was.

With non-code share interline traffic for domestic down to sub levels of a single percentage point - you have to ask yourself what useful function does ARC provide these days.

Frankly - I am very hard pressed to come up with any justification for either ARC or BSP in most markets.

Disagree? Send me a note or post a comment

Cheers

Timothy