'On the Fly' Seminars

THE TRAVEL-BOOKING WAR AND THE FUTURE OF AIRLINE DATA DISTRIBUTION
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Background

In late 2010, American Airlines banned Orbitz from booking seats on its flights. In early 2011, Expedia stopped selling American tickets. Meanwhile, Delta removed its data from eight less popular sites. Sabre, the Global Distribution System (GDS) American created more than four decades ago and current owner of Travelocity, announced its intention to drop American data later in the year. In response, American sued and won a court order temporarily blocking Sabre’s move.

Thus began a very public war between airlines and third-party travel providers — and possibly the start of a new trend in the distribution and sales of air travel products. Airlines incur significant costs by having their flights booked on a GDS, which also prevents them from selling additional products, such as preferred seating, priority boarding and doubling or tripling your frequent-flier miles for a fee. American wants both online and traditional travel agencies to use its DirectConnect channel to lower costs and increase revenue.

The significance of American’s move is much bigger than a dispute with a couple of third-party sites. It seeks to shake up the longtime airline data distribution system, including the GDS model. Travel agents haven’t received airline commissions for years, except for the largest agencies, though a part of the GDS fees airlines pay goes back to agents. American wants to reduce or scrap those fees. American CEO Gerard Arpey said in 2009 that third parties should be paying the airlines for access to their data, “rather than us paying them to distribute our product.”
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Objectives

This seminar offers a detailed description and explanation of the current airline data distribution model and the fundamentals of today’s booking system. It also looks at the events of the last several weeks and provides a factual rundown of the arguments and positions of all sides involved in the dispute — without taking sides.

Most importantly, the session examines how the current conflict affects travel agencies, companies and individual travelers. It offers specific advice on what they can do to avoid being caught in the crossfire, and to make sure they don’t increase costs and sacrifice convenience and comfort.

American has imposed “booking source premium” fees on some GDS users. Those fees will have to be either absorbed by travel agencies or passed on to passengers. Critics accuse American of trying to suppress transparency and deny consumers the opportunity to compare various airlines’ fares on the same screen, potentially forcing them to pay higher prices. But American points out that a change in the GDS model — establishing direct channels with airlines — would secure customers’ continued comparison-shopping ability.

So it’s messy out there, and this session will try to make it less so in your mind by giving you specific tools that will help you follow the best booking process for you.
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About the instructor

This class is taught by Nicholas Kralev, founder and CEO of Kralev International LLC, a travel consulting and training company, and former Financial Times and Washington Times correspondent. He has flown almost 2 million miles and visited more than 80 countries. He writes the “On the Fly” column and is the author of the forthcoming book “Travel for Smarties.”
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REGISTRATION FEE: $159
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An abbreviated version of this class is being offered as webinar FLY 115.