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The dusk of global distribution systems?

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Recently, we have seen an attempt to deploy a new distribution model that diminishes price comparison shopping for customers. American Airlines tries to push travel agencies to their new direct-connect program. This eliminates the need for global distribution systems. Result: higher fares.

Sabre being pushed away by American Airlines

American Airlines' direct-connect program is a way to effectively bypass the long-used and well-established global distribution systems (GDS). These handle all the communications between the airline and the customer. The main advantage is being able to search and book tickets of multiple companies. This does not limit to airlines, usually there are hotels and rental cars as well.

AA tries hard to move the travel agencies onto it's new program. Sabre Travel Network, being the number one GDS in the US, reacted by altering the way American Airlines flights are displayed. Most of their offers are now pushed way down in the search results.

This dispute is primarily no good for customers. Comparison shopping is likely to become troublesome. Making fare comparing more difficult enables airlines to push the prices higher. The market fragmentation will allow the airlines to impose various fees, resulting in annoyed and helpless customers.

90% of corporate travel managers don't support direct-connect

The latest development caught attention of the Business Travel Coalition (BTC). In a survey, they asked the corporate travel managers about their views on the ongoing changes in the industry. An overwhelming 98% of the participants do not support the American Airlines efforts to introduce the direct-connect system. Majority of them agree that having access to all airfares and fees is essential for their business and the AA's current pursuit is a way to push the airfares higher.

Source: Travel Daily News and Business Travel News


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