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Open Alliance Seeks to Preserve Price TransparencyJanuary 20, 2011 By: George Dooley Travel Agent
What does the newly launched 115-member Open Alliance for Airfare Transparency want to achieve? One answer comes from the first Open Allies White Paper that was released to the industry and is available in full online.
They note that over the past several weeks, the issue of air travel distribution has gained widespread public attention and offer the white paper to shed light on some of the key dynamics underpinning this debate.
The paper focuses on addressing key issues and offers useful data and commentary that illuminates complex and conflicting issues that divide informed opinion in the industry.
Several key goals from the white paper:
- The value of comparison shopping: First, the Open Allies look at the technological infrastructure developed by the global distribution systems (GDSs) that make it possible for travel agencies to provide customers the ability to quickly and easily compare the offerings of virtually every airline in the market to choose the options that best meet their customers’ needs;
- The threats to comparison shopping: Second, the Open Allies examine the emergence of airlines’ “unbundled” product offerings and new fee-based approach to merchandising. “This move, while potentially valuable to both carriers and customers, has been problematic because fees have not been consistently communicated to consumers at the moment of comparison shopping, creating so-called “hidden fees” that frustrate travelers, corporate travel departments and travel agencies. This threat to comparison shopping has been exacerbated by recent airline moves to impose costly, unproven new distribution platforms.”
- Creating a model that meets the needs of all stakeholders: Finally, the paper lays out the ways in which the GDSs have evolved to meet the needs of all stakeholders. “For airlines, GDSs have developed the means to allow for customized product offerings; while for travel agencies and consumers, the GDS platforms ensure that even customized offerings can still be easily compared in an apples-to-apples fashion, thus protecting their ability to choose the right travel options for their needs. This section raises the question of why airlines have thus far failed to fully embrace the customization available through the GDSs, suggesting that one motivation may be the desire to create walled off “direct connect” systems which would severely limit comparison shopping, thus reducing competition and opening the door to fare and fee increases.”
The Open Allies paper represents the first of a series of such explorations of the key issues facing air travel distribution. “It is the goal of the Open Allies coalition that through these papers we can advance the dialogue toward practical solutions that meet the needs of all stakeholders in air travel.”
Among the conclusions offered by the White Paper: “In the kind of fragmented and opaque marketplace Open AXIS (technology favored by many carriers) and others appear to be working to establish, airlines would pursue duplicative, costly “one-off” systems to market ancillary products.”
“ In this world, there are ultimately no winners, not even the airlines themselves. It would appear smarter to support interoperable solutions across multiple channels and the broadest consumer base possible, allowing corporations and agencies to shop, sell and fulfill their travelers’ travel needs in the most efficient, cost-effective process possible.”
“By making a commitment to a sustainable model, one based on the proven record of standards and technology already in the marketplace, where airlines are free to customize their services, and consumers are assured the ability to comparison shop, it is possible to promote a mutually beneficial world of airline profitability and traveler satisfaction.” That is the win-win scenario that the Open Allies for Airfare Transparency supports, the Alliance concludes.
For more information and a full list of coalition members, please visit www.faretransparency.org.