BTC and ASTA Fire Salvo at IATA

Probably not the wisest move on their part but ASTA and BTC have fired a broadside against IATA's NDC "New Distribution Capability".

For your edification I reprint here their entire statement, feel free to comment:

ASTA AND BTC CHALLENGE IATA CLAIM OF TRANSPARENCY REGARDING NEW DISTRIBUTION CAPABILITY
Alexandria, Va., October 17, 2012— The American Society of Travel Agents (ASTA) and Business Travel Coalition (BTC) today sharply disputed claims by Tony Tyler, CEO of the International Air Transport Association (IATA) that the development of the “New Distribution Capability” (NDC) was being conducted in open and transparent collaboration with all segments of the travel industry that would be affected by it. Nothing could be further from the truth.
“ASTA sees nothing in the IATA process to create NDC that resembles full and open transparent collaboration with the travel agency community,” said Nina Meyer, CEO of ASTA.  “ASTA had asked to participate as an observer, with the possibility of posing questions, to the IATA Working Group on NDC in Montreal in late November.  IATA’s response was initially positive, citing a desire to collaborate. ASTA then invited IATA to come to its TRADESHOW in Los Angeles in September to meet with travel agencies and the Business Travel Coalition and respond to questions.  When ASTA later asked for details of its Montreal participation, it was told that neither it nor any other agency associations would have access to the development process for NDC. IATA did express a willingness to meet separate with ASTA, but that is far from the full collaboration and openness that IATA is trumpeting,” Meyer added.
BTC Chairman Kevin Mitchell said, “While we are still conducting due diligence with regard to understanding all the facts and implications flowing from IATA's new distribution initiative, it's reasonable to preliminarily conclude from discussions with and presentations from IATA that there is reason for significant concern over negative impacts to consumers, competition and costs. A disturbing warning sign - that all is not right - is that IATA pointedly talks about an open and collaborative industry process, yet refuses to let organizations that represent travel agents and corporate travel departments have a seat at the table. IATA only welcomes individual travel agents or travel managers who are largely prevented from speaking up for fear of retaliation on their businesses or airline contracts. BTC is among several industry organizations in the U.S. and abroad that requested to be part of the process only to be told no by IATA.”
Nina Meyer added, “The need for complete transparency regarding NDC is illustrated by some of the false premises for NDC that Mr. Tyler stated in his speech before the IATA World Passenger Symposium being held in Abu Dhabi this week.  Mr. Tyler stated that because the majority of air travel is sold by travel agencies relying on Global Distribution System (GDS) technology, “the travel offer is put together outside the airline by third parties… it is impossible for the airline to tailor its offer to the customer via the indirect channel…. this model is focused only on finding the lowest ticket price. This has resulted in the commoditization of air travel…. the travel agent only sees codes – F, J, Y…. There is no way to tell if your “J” product is a flat bed or an economy class seat with an empty seat beside it.”
These remarks essentially blame travel agents for airlines’ commoditization of their product. But it is airlines that have set prices since deregulation and entered into commoditized code share agreements, not travel agents. Agents sell what the airlines offer.  And ASTA rejects categorically the notion that travel agents do not understand what they are selling and are unable to communicate product characteristics to their clients.  If that were true, agents would have disappeared long ago, but instead in the United States alone they sold $68 billion in air transportation in 2011.
Moreover, Mr. Tyler’s remarks cite as current airline innovations such items as “special meals, expedited boarding, roomier seats and access to airport lounges.”  Most of these “innovations” have been around for years. If these products are made available to agents in a transparent and transactable manner, which is entirely possible through GDS technology and the ATPCO OC process, travel agents will sell more of them to consumers to the benefit of consumers and airlines alike. ASTA has seen demonstrations of GDS technology that has these capabilities and more.  Rote repetition of the claim that the GDSs can’t do this does not make the claim any truer.”
About ASTA
The mission of the American Society of Travel Agents (ASTA) is to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. ASTA seeks a retail travel marketplace that is profitable and growing and a rewarding field in which to work, invest and do business.
About BTC
Founded in 1994, the mission of Business Travel Coalition is to interpret industry and government policies and practices and provide a platform so that the managed travel community can influence issues of strategic importance to their organizations.
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Shhhhh! GDS Incentives Are Headed South

While I missed The Beat Live this year - there were still about 130 people who showed up to debate the current market situation.

Writing in Travel Market Report Michele McDonald (who also publishes TTU) has tackled the thorny subject of  the future state of GDS incentive fees. There remains a pervasive view that the battle between the GDSs and the airlines will have consequences. Almost everyone focuses on the issue of cost.

There is a split in the ranks of the intermediaries. Some Agencies advocate pure transparency and provide the information on the incentive fees  to their clients. Others regard it as a perk of the business. However in looking at the holistic view of how much money is paid out - then we have to look at the total significant amounts paid out. My consulting firm has assessed the situation from publicly available documents and we believe that the total amount paid out in direct and indirect incentives by the GDS is a very large amount. $3billion is what we are projecting for 2011. That powers a lot of agencies' revenues. However this largesse is not spread spread equally. The squeaky wheel syndrome favours larger agencies. Further there are clearly geographic differences where highly competitive markets garner higher incentives than other markets where only one GDS may dominate.

There are some dirty little secrets that some agency owners and players tend to ignore. One of which is that legacy GDSs squarely compete with their customers - in more ways than one. We know that all of the GDSs have an interest in one or more agency outlets. EG Travelocity for Business, Travelport and its partners controlling Orbitz, and yes even Amadeus can still be said to have an interest despite having sold its outlet Opodo to a Franco-Spanish combine. One way that they compete in corporate travel is where the GDS contracts directly with the agency customers and passes the fees onto the customer directly.

And interestingly some of the largest incentive fees go from the GDS to (drum roll please) their own subsidiaries/affiliates. One of the lawsuit arguments between AA and Travelport is that the latter (and there is documentation in Travelport filings that illustrate this) is paying a "super" incentive to Orbitz in which there is effective control (by Blackstone companies) of 55%. You can be sure that if the incentives are to be slashed - then these subsidiaries and affiliates will be among the last to feel the cut. Which means that the regular agencies will feel the chill first.  And this is already happening. In several markets today - GDSs cannot pay full incentive fees on all carriers equally. Some airlines simply tack on the GDS fee to the cost of the ticket. Others either prohibit or significantly reduce the payment of incentives in their home markets. Some airlines and GDS contracts have specific clauses in which the payment of fees is expressly prohibited.

In my view there is an inevitability of the axing of GDS inventive fees by the legacy players. However there are broader and bigger issues which are starting to separate the traditional GDSs. The amount of pure R&D is making a difference. Those who are investing will likely see benefits. The cash paid out in incentives is a double edged sword. It has become a drug for quite a few agencies who in turn have to work harder to make the GDSs work for them at a time when the investment in real new technology has declined across the board. The agencies are having to pay more and more for "ameliorating" technology to cover these inadequacies.

The demand for new services are being driven by three factors

• by the needs of the suppliers 
• the emergence of new technologies particularly in mobile and social - and of course big data
• and of course by the changing generational dynamics of the consumers

These changes make functionality and personalization critical. That is not something that these "bribes" (NOTE this is my term and no one else's) can cover.

Cheers

Sabre's Mobile Study Sends Message To Mothership

Sabre has updated its mobile traveller study.

While the study sample size is in my view woefully small and the questions leave a lot to be desired (bundling of search and buy for example), it has some interesting messages for dear old mother Sabre GDS business and Sabresonic PSS business. I found the comments put forward by the head of the STINGroup Chris Kroeger interesting. A case perhaps of physician heal thyself. Here are the quotes that seem to me to make Sabre want to change some of the things that it does.

“Our survey shows that business travel today is personal. Travelers want the same functionality and convenience from their business travel tools that they have in their daily lives. People use travel services on their smart phones everyday and for every trip – before, during and after they travel,”

“The corporate travel industry needs to keep pace with the services and apps that travelers can access in their personal life and incorporate those into the world of managed business travel.”

“One of the biggest trends we see in the survey data is travelers’ desire for local business information and offerings based on their location via their smartphone or tablet,”

“Travelers will look for this information from suppliers, travel management companies and technology resources such as online booking tools like GetThere. Smart and savvy travel management companies will use technology as a way to fill this need and improve customer support and solidify customer loyalty. ”

“Today’s business travelers expect transactional capabilities from their mobile devices including buying air extras and in-flight amenities,”

“Tomorrow’s business travelers will move from physical passports, wallets and credit cards and will expect their mobile device to fill those needs as continued advancements in mobile payment, commerce and banking make it easier to electronically transact via mobile devices.”

Looking at this tells me that as a current Gatekeeper, The Dallas based company needs to look carefully at three major changes:

1. Providing content to its customers.
2. Mobilizing its applications
3. Removing onerous commercial terms to its users and suppliers alike.

So Sabre - consider this - the advice was free, the impact would be profound.

OK Break over back to the marketplace....

Cheers

The Impact of AA Out Of Expedia and Orbitz

The impact of American Airlines non-participation in Expedia and Orbitz during the period from the end of 2010 until restored by agreement (Expedia) and by a judge's order (Orbitz) was interesting in theory. But what about it in practice?



For the absence of ambiguity. The chart shows share sales and percentage increase/decrease in sales of airline tickets. This is transactions NOT sales dollars so they are a true like for like comparison. The source is ARC Corp. The full chart can be seen here. That bulging green line (downwards) represents a significant loss of airline ticket sales from Expedia and Orbitz. Far greater than I believe most people expected. With air revenue comprising such a small amount of Expedia's gross revenues - this did not adversely affect the Bellevue based company. For Orbitz however that does depend more on US Airline sales the impact as we have seen from the recent financial performance of OWW was significant to their bottom line.

This illustration is pretty dramatic and clear. In my view it shows two things.

1. That a single airline's withdrawal from key players in a specific market sector from one or more players who command 50% of that sector can be dramatic.
2. Even after restoration - the intermediary channels as a whole lose share.

There are other interesting things that can be read from this chart. Share does come back. Albeit slowly, but it does come back. it also shows that the OTA's expectation that the AA share would easily be absorbed by consumers switching to other airlines was false. The dramatic drop in tickets as illustrated by this chart is obviously not reflected in AA's total ticket sales loss.

There are many lessons in this chart. I leave you to draw your own conclusions. If you would like to discuss this directly with the Professor. Please see me after class.

Cheers

Sabre AND Travelport Take Big Steps Outside Air with New Hubs

While Amadeus has been retreating to focus on the air business - the other guys seem to be going the other way.

Sabre announced the major acquisition of Softhotels which will beef up their Hospitality business - already a vibrant component of Sabre and a major force in hospitality.

Travelport - free of the GTA boat anchor business - has now started a new Agent based leisure service for non-air.

Both of these announcements demonstrate the need of the core business to expand. As the GDS component of the Big 3 GDS companies declines and the market moves to a more open model - we can expect this form of behaviour.

However - for those of you who watch the space carefully - will this be a worthy replacement for the standard GDS business?

Well in my view the GDS yields will be hard to find replication for Travelport unless the former sink below 20% which seems to be on the cards. For Sabre this is a complimentary business and looks to help them in their quest to edge Pegasus out of the nest as the central player in Hospitality distribution.

Sabre Fires A Salvo To Agencies Names Dates

Chris Kroeger, Sabre's pointman in the battle with AA - has started their campaign to get the agencies to start pushing Agencies world wide to push AA.

So here it is - verbatim from the European version

Von: Sabre Travel Network [mailto:connected@sabre.com]

Recently, American Airlines (AA), through discussions and presentations with travel agencies and corporations, has indicated that it could be completely out of the Sabre® global distribution system as of June 1, 2011. I understand this may be causing confusion, and I want to take this opportunity to clarify our position.
Sabre® has no desire or intention to remove AA’s content from the Sabre system.
Sabre will continue to vigorously protect the transparent, competitive marketplace which creates value for travel suppliers and buyers. As part of this effort, we will take necessary actions to highlight the negative impacts of one-off supplier connections, uphold our contractual and legal rights, and work with airlines around the world to put in place full content distribution agreements that meet the needs of all constituents.
Despite the uncertainty created by AA’s latest communications, the fact is we have a full content agreement with AA that runs through August 31, 2011. It is our goal to do all we can between now and the end of August to reach a full content distribution agreement with AA.
Your voice matters. Make sure AA is clear on what you require to efficiently operate your business. We will continue to keep you informed on this important matter.
Regards,

Chris Kroeger
Senior Vice President, Marketing
Sabre Travel Network





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US Travel Q1 2011. Decline in Transactions. OTA Impact

At the Open Travel Advisory meeting in Las Vegas this past week Henry Harteveldt from Forrester showed that Q1 numbers were down 1.6% in terms of transactions.

I have previously shown that the numbers for the OTA's are also off. Yet digging through Expedia's numbers the information basically points to a lowering of the transactions in air for the US domestic market but not the dollar numbers.

With Expedia's market share in the OLTA bookings at about 41% and stable - we can only think that there is some erosion and share shift amongst the other players. Expedia's share of traffic as measured in UVs seems to have declined in Q1 but there are discrepancies between the Comscore and Hitwise numbers. The former showing stability the latter showing a decline.

Thus we can conclude that Orbitz and Travelocity probably experienced a decline while Priceline grew - ditto Kayak.

With Orbitz isolated in that it cannot sell American Airlines product, we can see that the situation for Orbitz will not be pretty when they report their numbers in the next few days - May 5th to be precise. Click here to listen to the Webcast.

Things will be interesting for a while.

Cheers

Sabre's Kroeger Video: Airlines and Bloggers Say Travel Agents Are Not Innovative

I am not in favour of personal attacks on anyone. However, I feel somewhat obliged to defend the honour of the blogger community against perhaps some unfounded accusations.

I was sent me a link to a recent video message from Sabre's Chris Kroger to their travel agents. There is no disclaimer on here so I am assuming that the information is publicly available and freely distributed to the whole world through the wonders of the Internet.

In this message he is proclaiming Sabre's Innovation. More of the content of how he defines Sabre's prowess in innovation - later.

In the message he states:

"Recently there have been a few airlines and a few bloggers who have accused Sabre of being 30 year old technology and not innovating. And in some ways they are saying the same thing about you (the audience is Sabre Travel Agency Customers) a user of Sabre Solutions."

As a point of order if anyone is going to accuse Sabre of being old - let's go with a better start date of around 1960. (Source Wikipedia). When Sabre was started inside American Airlines and subsequently became part of AMR Corp. it was spun out as a separate company in 2000. If we are to accuse Sabre of being old - let's go with 50 year old technology.

His charge that some airlines and some bloggers have accused Sabre of being 30 year old technology does carry a lot of weight. There are many parts of the Sabre system that are indeed running robustly today and that are of that age. Robert Wiseman (Sabre Holdings CTO) since joining from rival Travelport in May of 2006 and his team have done a lot to modernize the Sabre infrastructure and keep it running. Robert is the man who overseas the "Hundreds of Millions of Dollars to ensure that our system architecture remains modern and robust... through modern protocol..." that Kroeger describes in his little talk. But we cannot deny that the platform is old technology and based on a 50 year old design. And that is not necessarily bad. It works. However is it appropriate for today's market? That depends on the position that you take with regard to what Sabre is today. In my view - it is old fashioned and it does need to be reformed to provide an open solution to the world.

I want to be clear that this is not to say that Sabre cannot do innovation - it clearly can. The question is more does it feel it needs to do significant amounts of innovation? EG Moving from a legacy architecture to one that meets the need of the customer of 2011 rather than the long extinct customer of 1960 is no trivial matter. Are they doing so? They claim to be - you are the judge.

Sabre is no longer willing nor able to provide a complete cradle to grave solution for every agency. Nor should it have to.

However has Sabre relied on innovation to maintain its dominant position in the marketplace or other means is a good question. In the view of US Airways - it is not Sabre's lack of innovation that has caused them to file suit against the Texas based company. It could be construed as a contributing factor however.

In his own words let's just let Kroeger tell us how he thinks that Sabre is an innovator.

"The Average Age of the hardware inside our environment is less than three years old". Yet he neglected to say how old the software was. It would be very interesting to hear that answer.

So here is my challenge to Chris Kroeger. Why not tell us what the age of the software modules are in the Sabre system. Come up with a verifiable metric so we can get an idea of how old the platform really is.

If Sabre's PEEPS provide this - I would be more than happy to publish this information. Perhaps then we can have an open and honest debate as to whether Sabre is truly modern and innovating in the same league as the other three companies he alluded to namely, Facebook, Google and Twitter.

Let me try to answer the question we started with. "Are Travel Agents innovative?" To me that is easy yes - they really are. This is the ONLY way to survive. Do they universally look to Sabre as the leading innovator in distribution? I think that would be an interesting question which in my view they do not necessarily feel so positive about.

Sabre Travel Information Network claims that it is "Powering Progress". In my view sadly its business practices are doing exactly the opposite. That has nothing to do with either their software or their hardware but more to do with their contracts and their lawyers.

And what do you think? agree with me or not? Let me know. In the mean time - let's see what can be done about powering real innovation in the market through providing next generation solutions for the consumer in an increasingly complex world.

Gotta love this business - the oldies love to dress themselves up on a cloak of innovation rhetoric.

Cheers


PS - If we are counting - I guess I am older than Sabre. And just remember what Sabre (an IBM expression from the 1950s) actually stood for.

Is It All Really JUST About The Money? Airlines & GDSs To Duke It Out In Court

Sabre and Travelport - both private companies - have become the target of 2 lawsuits alleging Anti Trust behavior by AMR's American Airlines unit and US Airways. American Airlines is suing Travelport and its affiliate public company Orbitz (OWW). US Airways is suing Sabre. Both suits are similar in nature. At stake is the very nature of airline distribution in not just the USA but around the world. This analysis will hopefully provide the context of the battle. Sabre is controlled by 2 players - TPG and Silverlake Partners. Travelport is largely controlled by Blackstone.

It seems to have been a really busy time in airline distribution lately. We have had many things going on – so perhaps we should consider what is driving some of the changes going on. For many who are in the business – this battle has been a long time coming. However for the rest of the world and many others – this has caused a strong degree of head scratching. Consider this a primer on the core issue of control.

Let's just look at some of the major issues that have surfaces since October. This was the month when AA's battle with Orbitz burst into the open. Soon to be joined by Travelport, Expedia, and Sabre. Just looking at the last few weeks - I don't think we have seen such activity in a long time. Here is a list of some of the news stories over the past few weeks that have seemed to be disconnected. Here is a partial list:

• Expedia settled its battle with AA and committed to a Direct Connect – in doing so Expedia abandoned the GDS only model and agreed to go the direct connect route as well as signing its first LCC for Direct Connect – Air Asia in a far reaching Joint Venture.
• Delta Airlines signs with Farelogix to create alternative distribution services for the nation’s second largest carrier making a clean sweep of all the major North American carriers are now signed up to participate with the Farelogix platform. AC, UA, CO, AA, DL, US. Delta also makes the 13th Airline to have publicly committed to the system.
• The FAA Re-authorization bill passed without the GDS provisions that were defeated 3 times during the passage of the bill.
• The DoT issued new passenger regulations but in issuing this new "Passenger Bill of Rights" it declined to force (for the short term at least) provisions which would have made the airlines display ancillary services via the GDS.
• AA filed suit against Travelport and its affiliate company Orbitz Worldwide (owned 48% by Travelport) alleging anti trust behavior.
• US Airways filed suit against Sabre also alleging anti trust behavior.
• The DoJ after a lengthy evaluation approved the Google/ITA deal – the deal has now closed.


Are these unrelated? I don’t think so. But let me just focus on the 2 lawsuits.

For a minute let's just consider what is driving their thought processes. I am taking this from the perspective of the parties who filed the suits. We have not yet seen the defense other than both parties (Sabre and Travelport) has said they will vigorously defend their position. I have opined before that in my view Travelport’s statements lack some substance and so far have contained some factual inaccuracies but since they have not filed a formal brief – this can be construed as PR spin. . Don’t forget GDSs and Airlines can hire some pretty serious legal firepower. This battle is not new. Don’t think for a minute that the Airlines have not just woken up yesterday and said - "we're bored, let's go after the GDSs". This battle was clearly a very long time coming.

Both lawsuits (AA vs Travelport/OWW and US vs Sabre) are very explicit in what they want and the respective positions. While they appear to be similar - each airline comes from a very different space. The AA lawsuit is somewhat of a pre-position. The US suit is backward facing for the contract it already signed.

The AA lawsuit actually names Sabre several times in its suit against Travelport. AA has made its sentiments known that it feels the GDS model needs to change. Possibly after 9/11 and perhaps we can trace the lineage of the battle to the very moment that Sabre was spun out and AMR (AA's parent) put the resulting cash in its pocket. US Airways however is not quite in the same position. They are the smallest of the big airlines (Now comprising just 5 in the USA). They never owned a GDS. This makes them the least able to apply leverage in the ongoing battles. They also have effectively put themselves up for sale by delivering a message that consolidation is not yet over and that US Airways is ready to be merged into another airline - AA according to analysts - perhaps being the favorite. One could even opine that US is trying to ingratiate itself with AA. I make this point because I believe US Airways thus is not arguing from any position of strength. Ultimately in terms of scale we have to remember that the market share of each of the major American GDSs exceeds that of any airline in the USA market.

The driving forces for the lawsuits are that the airlines believe they asked nicely (well as nicely as an airline can) that the GDS behave differently. IE that the GDSs change their model. The GDSs refused both publicly and privately to budge. Indeed they went on to consider any change should be viewed as a nasty attack on their core business model, for which a vigorous defense needed to be mounted. Were the airlines napping on the job? Perhaps yes they were for a while. They thought they had a deal with the GDSs.

in 2006 the airlines and the GDSs entered into a form of social contract. The background at that time was that the GDSs were scared that the Airlines would provide content on their own websites that could not be seen on the GDSs. Thus moving both the trade as well as the consumer to more favourable content on the airlines own sites. The genesis of the Full Content Agreements was that the Airlines would give the GDSs full content in exchange for reduced fees. (I want to avoid using the term discounts which is how the GDSs saw this). This social contract worked pretty well because essentially all the major legacy carriers signed up for it.

In airline distribution - the traditional basis of the distribution landscape is one for all and all for one. Or as I prefer to characterize it as "one size fits everything." However the GDSs lawyers might have been smarter than the airlines' lawyers. Why? Because the GDSs managed to put in a number of provisions that created a far stricter contractual environment. So the issue of full content tied with a number of other provisions gave the GDSs a distinct edge. At the same time the GDSs started down a path of increased tighter contract provisions with their user community; the travel agents - the subscribers. In doing so they created a Gordian Knot. The airlines were trapped. The subscribers were trapped. The analogy - admittedly somewhat extreme - but humour me here I think you will find the comparison is not that odorous - it could be likened to a drug cartel (aka the GDSs) were able to control distribution.

But let’s not shed too many tears for the airlines. In the early part of the millennium the airlines ceased to provide compensation in the form of standardized sales commissions to the agencies. Thus the agency players and the airlines ceased to have a compensated relationship. They still however retained a contracted relationship either directly or via ARC. The corporate customers of the agencies allowed the water to flow downhill by paying the increased freight of an access fee for use of the agencies' services. Thus these agencies - TMCs - were able to transfer from a supplier paid fee model to a consumer paid fee model - a transition that went remarkably well. Even the leisure agents tried this for a while but this fell apart when Priceline refused to join the fee based model. In recent years the other OTAs - largest players such as Expedia and its fellows abandoned the fee model for leisure bookings. Sadly the independent small agents were not so lucky and this effort drove many of them out of business. From a peak in the mid 1990s to today the number of agency locations has collapsed from 55,000 to now below 20,00 outlets.

Thus there is dissonance in that the travel agents are in many cases not directly compensated for selling airlines product. This somewhat advantaged position works for the airlines because they regard their product as being valuable and that the consumer and their channels should pay to access the product. This conveniently forgets that the agents actually do add value in aggregating content for the creation of neutral offers to their consumers a core value proposition for the consumer.

The GDSs too started playing a number of games. Firstly they had created an artificial MSRP pricing structure and backed it up with the charade of saying they were providing large discounts to the airlines. How much of a charade? Even after allowing for the cut rate prices -Amadeus's margin in 2010 as provided by their annual reports show a margin of 48% on its GDS business alone. The other publicly available information for Travelport shows that its margins declined from a peak of 33% in mid 2009 to the current level of 28%. (Does Amadeus know something that Travelport doesn’t?) We can safely assume that Sabre is in the same ballpark. The average segment fee (net revenue) for each company was as follows:

Travelport – rose from $3.47 in Q1 2007 to $5.83 in Q4 2010.
For Amadeus we only have data from 2009 which shows the revenue per segment rose from (Q1 2009) $3.28 to just under $5. ($4.97 in Q4 2010) when converted from Euros to Dollars.

So despite the social contract between the GDSs and the airlines the actual cost to the airlines rose significantly during this time. NOTE I am using publicly available information and you can find this out for yourself on the websites of Travelport and Amadeus.

Indeed one could argue that the social contract was flawed to begin with but the GDSs (now fully controlled by the money guys in the form of Private Equity/Venture Capitalists) had obligations to increase their margins. How did they do that? They cut costs by slashing payrolls, cutting pure R&D and by changing their agreements.

In the case of Travelport there were significant synergies gained by the merging of the Worldspan and the Galileo businesses. However Travelport was upfront and said it would not bite the big one and merge its (now 3) GDSs into a single code base. In my analysis all the GDSs gained incremental net revenue through two techniques. Through unbundling their core segment fees, long before the airlines became effective at unbundling – the GDSs were doing this and made good money from it. But they also changed the contracts to further tie the airlines. At the other end they were able to generally reduce the cost of the subscriber delivery through cutting back on services. But the one area that they could not cut was in the segment incentive fees (aka as US Airways describes them “Kickbacks”). The competition for smaller pie – i.e. the reduced agent community – meant that the GDSs had to pay ever increasing incentives to the agencies to ensure a reliable user base. What happens is simply the GDSs take a portion of the fee that the airlines pay and kick back this portion to the travel agents.

To examine this - have a look at Travelport's 2007 and 2010 end of year financials.

2007

Cost of revenue.....................................$1,167
Selling, general and administrative......$1,286
Separation and restructuring charges.......$90

2010

Cost of revenue.....................................$1,164
Selling, general and administrative...........$547
Restructuring charges..............................$19

I think you get my point. During this time Travelport's segment count fell from 416.2 Million to 349.4 Million segments (all 2007 vs all 2010).

Rumours abound of the amounts paid not just to get agents to switch but also just to stay in place. These payments are so large in more than one market the asking price for a GDS segment incentive is $4.00. To cover this cost the GDSs must be indeed cross subsidizing the bigger agents (i.e. those with market power) from two places firstly the weaker and smaller agents who tend to be brick and mortar; secondly from those markets where they don’t have to provide incentives due to their market power – which today are very few.

In addition to the core issues above – the airlines feel that the GDSs have not kept up the investment in two key areas. Functionality to support the sale of ancillary and unbundled products (seats, bags credit card charges etc). The other charge is that the GDSs have actually inhibited the ability of the airlines to sell personalized services via the intermediary channels. For whatever reason - the GDSs do not provide these services today except in very few cases.

The core of the arguments that the airlines feel harmed is not just based on cost. But ultimately it is based on the argument of who controls distribution. So these lawsuits are about breaking the Gordian Knot.

Want to read some more?… actually you could have largely done a cut and paste of the law suits by going to a not quite so obscure website and downloading the Airlines comments on the US DoT NPRM concerning the Passengers Protection. Last week the US DoT turned this into law. Curiously only after two events. Event 1 - the Dept of Justice had approved the Google Acquisition of ITA Software. Event 2 – the FAA bill was approved by the US Congress. Coincidence?

The final rule making is here: DOT-OST-2010-0140

For AA’s comments on this rule making go here:
For US’s comments go here:

So now you know – where you sit in the debate should at the very least be powered by the information to hand.

I recommend that you go through the other submissions on the dockets. There is a lot of material in there. Then sit back and think – are these events connected? Yes. Is my answer. However the airlines feel emboldened by the changes coming. What we are seeing is nothing short of a fundamental shift in Airline distribution.

Catch the wave. Open Distribution is with us.

Cheers

1 Blind Mouse

Hickdory Dickory Dock, the mouse ran up the clock. The clock struck one and the rest of the industry died in a nuclear holocaust.

OK so its a parody but it hides a very serious message.

I read today the latest missive from the kitchen table in Radnor PA. BTC released yet another of its fine episodes in "as the world turns"

QUOTE:

"For two and one-half years, despite major corporations’ substantial collective purchasing power and their continuing calls for full disclosure of fee data, airlines have refused to provide the travel agency sales channel with this vital information. This refusal is well-defined evidence of a marketplace that is not functioning properly." END QUOTE.

Well this is not the case.

Each airline is obliged by law to explain its pricing and provide that information to the public. It so does - or risks the wrath of every consumer protection and government regulatory body under the sun.

And let me be clear - there have been transgressions in the past.

But in the main the US airlines are good at this. They provide the information to the consumers and to the agency community.

A long time ago - the airlines got tired of using the rather poor legacy GDS vehicles for disclosure of information. Instead they turned to the preferred form of communication that the vast majority of both consumers and travel agents use today - namely the Internet.

C'mon guys. No one owes anyone a living. Comparative shopping COULD have been easily provided in an innovative form by these GDS players but they chose not to. Consequently this is why Google stepped into the game and bought ITA for $700 million. If the GDSs had done their job well and in a time when there was good cooperation with the airlines - then companies like ITA and Everbread etc would not have been able to come into being. So let us not shed a tear for companies who today make between 27% (Travelport 2010 Q4 numbers) to more than 46% profit on their GDS operations. (Amadeus 2010 annual report).

And this continual obfuscation over the real issues is just INSANE.

Everyone should as a matter of course READ the complaint in full. Then make up your mind. There is a lot of information that should give food for thought to a lot of people. Surprisingly I found it very informative as an eye opener onto the issues.

DO NOT DISMISS THE CONTENT & DETAIL. It has relevance for everyone concerned with this debate.

DO NOT JUDGE until you have read the document and the expected responses from Travelport. I hope that the complaint comes to trial early but alas I fear that American justice moves at a slow pace. About the only thing I agree with the Press Release is the following statement:

"Expensive and years-long court proceedings"


Cheers

They Are Smoking Things At Sabre Central

A great post by Dennis Schaal of Tnooz today on the GDS Have vs Have Nots.

In case anyone should now doubt the airlines resolve to break down the restrictive and expensive nature of the GDS model - they can see now that AA was the one that pushed the envelope. Now it has its policy if not vindicated then at the very least validated.

So what of the other side of the argument? Sabre put on a brave face and proceeded to rubbish any idea that the AA+EXPE deal was anything but a reaffirmation of the GDS model. The Sabre Peep commented:

“GDSs already have aggregation technology — that’s what we do — aggregate content in one place,” St. Pierre says. ”We already aggregate AA’s content, along with hundreds of other airlines. As such, there is no need for a one-off direct connect.”

And this perhaps underscores the legacy GDS head in the sand approach.

Hello is anyone dealing with reality over there in South Fork (aka Southlake TX).

This is not about the single battle between AA and one GDS. It is about driving innovation in distribution and lowering the cost by reducing or better eliminating the hidden tax that the GDS fees impose on the consumer. It is about giving the consumer choice.

I find it hard to believe that Sabre doesn't get this. However I do believe they are actually harming their credibility long term by not coming to the market with pragmatic and more honest approach to providing the value to the intermediaries and the airlines.

Let's hope they try and treat the marketplace with a little more deference and give the travel distribution community some acknowledgement for having a brain.

Cheers

Is There A Bully In The Playground?

or perhaps the statement should be - Bullies In The Playground.

My first encounter with Sabre was in 1979 when I was working for Western Airlines at McCann-Erickson. In those days the whole notion of the power of the CRS (as we called it) was just a convenience nobody thought of the possible power they would wield.

A year later I was in New York working for Mary Wells on the Pan Am account and for the first time saw the unbridled marketing information that Sabre gave to American Airlines. A copy of the sales reports that AA salesmen used to cut deals with Travel Agencies accidentally fell into my lap. It was mind boggling the information that a single airline had on its competitors.

From the other side of the fence - the power of an AMR owned Sabre became a thorn in my side when I ran automation for a large TWA focused travel agency which had PARS in the front and Sabre ADS as its back office. They really didn't like us messing with the system especially after I opened a back door to Sabre.

However I have always had a healthy respect for both AA and Sabre. They were so joined at the hip as to be inseparable even after various government probes into their somewhat dubious market behaviour. Yes they did believe in throwing their weight around.

AA/Sabre at this time was the undisputed market leader and acted as such. In April 1992, American Airlines launched "Value Pricing" -- a radical simplification of the complex pricing structure that had evolved over more than a decade following deregulation of the U.S. domestic airline industry. American expected that the new pricing structure would benefit consumers and restore profitability to both American and the industry as a whole.

Did it work? Nope - within weeks the airline had back-tracked and was back offering normal complex fair structures. But the net impact was not that great and AA emerged unscathed and stronger for understanding the dynamics of the market.

AMR proceeded with the divestiture of Sabre in 2000 - the now named GDS player was the largest Data Processing facility in the world and produced 3 out of 5 airline tickets worldwide. (Source: Annals of Cases on Information Technology By Mehdi Khosrowpou).

However since then the emergence of the Internet and the fragmentation of the distribution system - the dominance of the GDS has declined. Share shifted directly for a lot of reasons.

The emergence of the large OTAs and the decline of the Mom and Pop agency were synonymous. The travel distribution pyramid narrowed. But other factors have emerged. The decline in functionality footprint of the GDS, the emergence of valuable third party applications that made the GDSs work better... I could go on but I think you get my point. The GDSs lost their position as technology leaders. And worse the customer base stopped drinking the CoolAid. But that was compensated by the GDSs shoveling cash at the travel agencies. The bigger the intermediary the more cash you got.

Now we have battle royal. But who is the bully boy(s) ?

It would seem that the numbers make American actually the small player here. With the approx numbers as follows:

50% of all travel is bought online
50% of all travel is bought via supplier direct. Mostly via Airline.com and call centres.

50% of travel distribution in USA via intermediaries is on Sabre. They are a little ahead of Travelport and Amadeus is a small player in the market with approx 10% market share with the various other players making up approx 1%. Note that these numbers are not public so I have to "normalize" them.

In the space of a few weeks in the latter half of 2009 American walked out of Sabre's PSS business See my blog for that event. And then they started their noise about Direct Connect saying that they would make all connections go through their advanced functionality gateway.

AA CEO Gerald Arpey said at the time: "...maybe I'm dreaming here," he said envisioning a future "where those folks who are the intermediary between us and our customer have to pay for access to our product rather than us paying them to distribute our product." Arpey called that shift a "long-term vision," rather than a near-term reality. Within days Delta CEO Richard Anderson followed with a similar statement saying, "Over time, the industry has to evolve to the model of other industries, where people pay us for our content rather than us paying them to take our content."

I am not so sure that those words are coming back to haunt him. With AA controlling no more than 15% of the total air market - they are dwarfed by Sabre and the OTAs.

So who are the Bully Boys in the playground?

It would seem that Sabre (who is still under DoJ investigation for its treatment of Farelogix in 2009) might have now regained its stature as the big Kahuna in the playground. Or this could be the last gasp.

I will still say - be careful what you wish for - if it comes true you might not like the result. After all the Internet so far has become a Bully Free Zone (certain players excepted).



One thing is for certain - all those people who have been arguing for the GDS based neutral model - their bets are looking a good deal shaky right now. The GDS has been shown finally to be not neutral - ditto the agencies especially the OTA players. So the myth of neutrality in a web transparency world has finally been busted.

How smart with the intermediaries be? I think that will rest with the consumer. So far he is showing himself to be a very savvy player. If he feels that the value proposition of the intermediary has been eroded - which early indications seem to demonstrate - then the ease of switching will easily match the difficulty of searching in more than one place. Since the consumer looks in multiple places and buys where he is happiest - these days increasingly direct - then that becomes learned behaviour.

And over in the corner - Google is quietly rubbing his hands going - YES!


Cheers


Cheers

A Saber Tooth or a Sabre Blade?

Gotta love those nice people at Amadeus. They like their competition a lot!

Check out one of their moonlighting senior IT guys and his history of the CRS.

Does this mean that Amadeus is trying to re-write history? Well for $119 you too can find out.

Hmmm hope not. I am not a big fan of revisionists. They are up there with Birther Movement folks.

Cheers

Who Is Fooling Who?

This post is going to be a bit self serving - but I have been waiting for a long time for someone to ask this question. Since no one seems to be doing the honours - looks like I will have to ask it myself.

The question is directed specifically to the legacy GDSs. Each of them has a new product that promises to connect to the other GDSs.

Amadeus One
Sabre Red
Travelport Universal Desktop

(I am not showing favoritism - this is purely in alphabetical order by vendor and by product name).

The promise of multi access content by a GDS based tool complete with access to third party content INCLUDING other GDSs is quite interesting. Surely it is not a technical restriction. Even going back to the good old days of ALC this has been possible with ALC boards from companies like Lanyon, IBM, Emulex etc etc. So it's a commercial issue or is just bloody mindedness? Perhaps something even more sinister?

So far I have yet to see a single announcement of these new tools actually coming to a commercial agreement where the user is free to access third party content on these new agency desktop tools.

GDS contracts now (frequently) contain specific exclusion clauses that expressly forbid the use of a GDS provided tool from accessing third party content of any sort without the specific permission of said legacy GDS.

For those of us old enough to remember when GDSs used to provide agency automation. There was the ludicrous situation of the provider trying to prevent a user from not accessing the web via the terminal to access another GDSs content. Being the sort of person I am - I used to sneak onto stands at Tradeshows and call up a web screen and have a different GDS screens displayed. It would drive people nuts. A Sabre Screen on an Amadeus Stand, A Worldspan screen on a Galileo PC (before the shotgun marriage). I almost felt like a graffiti artist!

Many of my clients have been actually accessing multiple systems for years. it was to enable them to be commercially competitive. If you take Europe where the largest (by passenger) international airline is Ryanair - there is no possible way to prevent a good travel agency from accessing non-GDS content. But there are GDS specific contract clauses which either expressly forbid it or place punitive terms for engaging in that behavior. In the view of what my clients provide as solutions on the technical side - they provide open access tools that enable access to any content through common interfaces for B2C or B2B applications.

So let's cut the rhetoric shall we and call a spade a spade. GDS open access is a marketing ploy and a nonstarter in any form of reality.

But let's see if anyone tries to do it. I have actually seen demos of all 3 tools with access to other GDS content. Too bad the commercial nature of the legacy GDSs which is to restrict the access to having them be the gatekeepers (complete with ever rising toll charges).

But let me make a prediction.

This is going to be swept away. The control of the access to content by anyone - will make that player go the way of - well let's say AOL.

Predicting when it will happen is somewhat hard - but happen it will.

Just as the Fool on the Hill.

Cheers

MakeMyTrip Pops a Big One - Travel Is Hot Again

Ah yeah baby...

Travel is HOT HOT HOT.

The 89% first day pop on Indian OTA Make My Trip should give a lot of people confidence that travel is back and back big time. In what the Motley Fool called one of the hottest in years... there is a lot for the industry to smile about.

So let's see - is this just the consumer market or is there good stuff that can occur elsewhere in Travel Technology?

In my view this should give the Gnomes of Langley and Atlanta some comfort as they struggle to find ways to put a little lipstick on the porcine Travelport. For Sabre this will undoubtedly revive the debate as to whether they go wholly out as an entity or if they go down the Blackstone path and push Travelocity out separately. While Travelocity is a great property - it has lost its luster like any of the big four with the notable exception of Priceline.

Cheers

New Delta Website - Needs Work

So the reason for my frustration with Delta's website yesterday was due to the fact they were putting the new site up.

Congrats - it actually works. However I would like to have the old one back again please.

The login is a little more clunky. OK I can live with that. There is no where to indicate that by entering the city exposes a new set of choices on what type of trip I can book.

They do go on to tell me how much they have changed and how the benefits are therefore me....

Let me give you an example...

Here is what they tell you...

SkyMiles Dashboard: See your mileage balance at a glance—and if you're a Medallion member, you can see exactly how close you are to reaching the next Medallion level.

Hmmm not so. So probably that is crashing right now because this is what I see when I click on skymiles (and yes I have tried it in 4 browsers so its the same).



As you can see although they know I am a platinum member - they are asking me to join Skymiles. Oh dear! In fairness to DL - they do say that they are working on it.

My assessment after an initial spin around the website is as follows:

The top level nav is good. The rest of the website is largely unchanged. So the other elements are familiar. There are new ad serving opportunities that didn't exist before.

As to the core value of providing access to the results I want to see... well that is unchanged. The resulting system still works on a hard and fast LOWEST POSSIBLE result without allowing me to shop with different parameters. Thus the ITA shopping engine in Orbitz offers much better results that I cannot get through either the schedule or pricing path inside the DL site. So in my opinion the ITA QPX engine is superior to the Travelport engine used on the DL website. Sabre's engine which is getting rarer these days still powers the Travelocity site and gives more options but not necessarily better results.

Its also pretty slow. But this is the first day so I hope it gets better but initial analysis indicates the pages are very heavy to load.

So at present I give DL a failing grade and I want the old site back. It seems this is going to be a work in progress for a while as they go through the whole site and fix things

Right now there is a LOT of things to fix. Basic logic is failing. However I persevered and was able to make a booking. Delta should be giving free upgrades to everyone who tried to book and failed.

Cheers

Travelport to Announce IPO Soon?

Ok the rumours are already flying... Travelport will make its announcement probably this week with their Q2 results. The announcement will come if its going to during the results call, scheduled for Thursday August 5th at 11AM EST.

In the past few days it has been ramping up its PR as a way to get some positive news into the market. This morning's mail box revealed a mailer for Travel Agents trumpeting the Continental Full Content Extension and on the website UA and TP announced their extension.

All this points to the announcement on Thursday. It first surfaced as a rumour on June 25th after the rather embarrassing pull back of its initial offering in London earlier this year. Amadeus got away nicely in Madrid so the stars should be aligned for Travelport.

Or maybe not...

Travelport still has some significant challenges. UDT - its star new product also called Universal Desktop now nearly 3 years late in deployment is not there yet. Early adopters trying to implement additional content are finding the interface and the data structures challenging. Its airline hosting business fails to excite and this is an essential part of a long term survival strategy for the core reservations based business. Its Orbitz partner/sibling/customer is also not setting the world on fire being squeezed out by the rise of Priceline.

The spin meisters will be working overtime to make the animal look good. But the investor community remains guarded. Enthusiasm for the deal was decidedly less than stellar with a strong set of issues on multiple levels that caused the collapse at the Feb 2010 IPO attempt in London. The fundementals of these issues have not gone away. The City Gnomes are not known for their forgiveness nor short term memory loss.

Greece (one of the reasons cited for the pull back) is just as sick if not worse. The retail climate is not as hot - retail sales failed to ignite the US market. But the investment climate is definitely better in the USA. Is that enough?

For investors who are still very weary of get rich quick schemes - they will be looking hard at what Travelport intends to do with the proceeds. If they are going for just debt retirement that will not be viewed positively. Savvy followers of the sector realize that there is a growing investment curve driven by the needs of the market for distribution of the unbundled airline products. Travelport has several areas that need investment such as its fare products as well as support of ancillaries. These are not trivial investments. With little airline reservation revenue supporting it - Travelport faces challenges.

Also worrying must be the amount of incentives and the resulting pressures on yields from increased marketing costs which are long term in nature. This was already highlighted in the Q1 results. The ability of some airlines to drive lower costs from their "Full Content" deals means that Travelport is more vulnerable to distribution pressures than Amadeus and Sabre are.

Of course the emergence of Google/ITA and new players such as Everbread in fare search systems challenge at a core level the concept of the legacy GDS that is the centerpiece of Travelport's business.

Travelport is therefore a riskier investment than its class members.

So this is definitely a story that will be interesting to watch. Let's see if the Professor is right.

Cheers

So What’s The Real Problem and What’s The Real Answer?

The launch of Open Axis as the standards group for Airlines in Ancillary Services and Direct Connections last week caused a bit of a stir. It has definitely miffed a lot of people. The Legacy GDSs and those who depend on them are good examples of that camp. Indeed also last week at the same time that the Open Axis group was holding its inaugural press conference – in Washington there were hearings where outraged players were moaning that the airlines were not playing ball and providing the Ancillary Services information to the GDSs. I never thought I would see the day when a Hearing in the US Capitol would be held to support the GDSs!

In sifting through the responses over the past few days – I was enjoying a degree of reading how different groups want to see it play out. There is a very good article by Ian Tunncliffe in Travel Technology Update. (Sorry this is by subscription only). So I will give you the essence. Travel Industry Technology needs to get a life and the debate over standards is irrelevant to a market where a vendor can deploy a solution such as an iPad and get traction of thousands of Apps and users without paying any attention to such standard. (OK so this was my interpretation of the piece but I am sure Ian will forgive me for this latitude).

What’s more he is right.

The Professor definitely believes that standards help and has already put his money where his mouth is by endorsing the Open Axis standard (via my alter ego). I am also a great advocate of the Open Travel Alliance and I really hope that the two bodies come to an accommodation if nothing else.

So are these views inconsistent?

Actually not in my view and here is why. I have for a long time believed that the rigid structure of the legacy GDS controlled travel workflow restrained innovation not to mention the free flow of commerce. In the early 1980s it was very useful for piggy back technologies such as Lanyon Boards. In the 1990s the standards enabled the OTAs to come into being. However the real Travel 2.0 the one we all use didn’t want to be constrained. In the past 5 years new businesses in search and itinerary management emerged and have done a very good job. Much better than the GDSs did. So the footprint of the legacy GDS shrank further and further inwards. Having worked in extensively in the OTA world I have witnessed all the major functions of the GDS have been replicated and indeed far exceeded bar one. To wit:

Fare Search – OTAs do better – and Meta Search does just as well particularly in combining fares and availability
Availability – OTAs do better in presentation
File Management/Itinerary – OTAs do better – and Itinerary management services do even better
Customer Management – OTAs do better
Supply Chain access – GDSs do better.

Then add Web 2.0 with the Social components to it and there is no way for the legacy GDSs to hope to match that capability. Even in the interaction of their customer users they have abandoned their dedicated networks in favour of web based solutions.

With the commercial model being driven by the supply chain component – it was only natural that for both commercial and technical reasons (as well as a host of others) that the suppliers would want to tap into the broader market where innovation and customers live. This meant that there was an inevitability about the Supply side wanting to open up access to the general market. (I need not elaborate for my readers that the restraint of the GDS so called “incentives” to users is an evil thing in my view.)
And this is not just theory of the world being a happy place where the GDS model alone addresses distribution to the open market. The legacy GDS global market share of airline traffic has been falling steadily for years. Eroded by both the emergence of LCCs and the greater direct distribution by the Full Service Network Carriers.

Returning to my questions… The real problem has been that the bootstrapping of airline and travel IT to extend the old GDS based model has reached the end of its life cycle. And yes – a new world where Apps can be built and deployed in hours vs years in a far less rigid world has become the de facto standard. Open Access by what ever name has become the norm. The real answer is that we have to now go back to the core reservations systems providers – the PSS vendors – and start beating the drum of revolution. Now is the time for the IT infrastructure to become open and decidedly more nimble. I can imagine that the airlines will not like this. Decidedly the big hosting companies – Amadeus, Sabre and HP/EDS will hate it. The GDSs who have depended on this closed architecture for years are going to be very unhappy. But in my view they have no choice but to change and reform. Then we can stop having IT get in the way of business.

So what are we waiting for?

ARC Numbers - A Robust Q1 - Ash Impact

The numbers from ARC are in for March and I have had a chance to review them. I think they look pretty good. What is interesting is that yields are actually running higher than in a long time.

The headline numbers for the month of March/YTD are pretty encouraging:



So now we are seeing some real improvement lets keep fingers crossed that (absent Ash) the market is on the up trend.

BTW I did a quick back of the envelope job on the total number of passengers affected. So far if we assume that the average plane affected has a capacity of 200 passengers (considering the mix of transatlantic large planes and European single aisle craft - this is a good number). Strangely enough my numbers (average of 1.1 million pax a day impacted) differ slightly from IATA. But I suspect that the word impacted means that some passengers were delayed as opposed to outright lost flights. Air4Casts was also using 1.1 million pax a day that I believe is the right number. So using IATA's numbers that is 7.2 Million passengers in 6 days. Ouch.

The US wont be as badly impacted although this is the largest portion of the international non-continental traffic. But still the global number also affects the GDS. Using the global number of 7.2 Million tickets and some very broad numbers - here is the estimate of GDS impact:

7,200,000 Tix total
3,600,000 GDS Tix
8,280,000 Segments
57,960,000 GDS lost Revenue @$7

Ouch - and the majority of that loss was from Amadeus.

Cheers

jetBlue Completes Migration To Legacy Carrier

In the recent years - airlines have fallen in love with the Low Cost Carrier model - LCC. But more recently as the strictures of the model start to constrain the growth of the business - the startup LCCs are started to adopt more hybrid like characteristics. At the same time the legacy full service network airlines have adopted many of the LCC characteristics. This dual trend - big airlines becoming hybrid and LCCs becoming hybrid has now passed a formal milestone. The first LCC to become a full service legacy carrier.

Welcome to the old boy club JetBlue.

In the past 3 years jetBlue has undergone a radical transformation. Here are some of the things it now does:

1. Participates in ARC
2. Participates in GDSs
3. Interlines
4. Hosted in Sabre
5. Is partially owned by LH

Etc etc

So as you can now see - jetBlue has become a full service network carrier just like all the others. Voila - completing its transition.

Seems like the LCCs are the dying breed despite their greater profitability.

Hmmm food for thought.

Cheers