Agents Benefit From New Ancillary StandardsMay 11, 2010 By: George Dooley
Industry leading travel management companies, online agencies (OTAs), and global distribution systems (GDSs) are supporting plans to implement industry-wide technology standards that will increase the visibility of ancillary costs to leisure and corporate travelers. The move could deliver long term effects on shopping, booking and reporting of ancillary airline services.
The standards will encourage the use of new capabilities that are being developed by the GDSs to help agencies manage the complexity of unbundled offerings, while enabling airlines to differentiate through the sale of ancillary services across all distribution channels, the group said. Use of these the standards will also create the opportunity for airlines and agencies to sell ancillary services seamlessly, and corporations to optimize their business travel programs by better anticipating and tracking their full air spending.
American Express Business Travel, BCD Travel, Carlson Wagonlit Travel, Despegar, Expedia, Egencia, HRG, Opodo, Orbitz, Orbitz for Business, Travelocity, Travelocity Business, Amadeus, Sabre Travel Network and Travelport have agreed to support common technology approaches for the merchandising of airline ancillary services.
British Airways, Delta Air Lines, LAN and WestJet support the development of this capability as an option for distributing new products and services. Additionally, Air New Zealand has confirmed that it is mobilizing OC and EMD projects.
By combining Airline Tariff Publishing Company's (ATPCO) category for optional services “OC” fare filing capabilities with soon-to-be-enabled Electronic Miscellaneous Documents (EMD), airlines will be able to quickly introduce their revenue-building ancillaries to the broadest travel audience through both indirect and direct distribution channels.
The group of travel industry buyers also endorses the development of common messaging standards for direct API solutions for those airlines that wish to manage the ancillary data directly with a GDS, enabling the easy and efficient shopping, selling, payment and reporting of ancillaries.
Travel agencies are experts at selling airline products to their customers, and they have keen insight into how these groups want to buy airline products, the group said. By using industry technology standards, airlines can quickly deliver the ability to sell ancillary services. Additional capabilities will emerge throughout the year to enable corporations, agencies and airlines to complete the sale and fulfillment of these products within the GDS, enhancing agency efficiency at the point of sale, and integrating into existing back office systems.
Over the past year, many airlines have evolved their business model in an effort to generate incremental revenue by either creating product bundles that differentiate their offerings or by bundling and unbundling various products and services, such as premium seating or baggage fees.
The agreement aligns GDSs, online travel agencies and travel management companies around support for the use of recently developed technology standards to help airlines introduce new unbundled fare structures, and demonstrate what is included in bundled fares, while also providing consumers and business travelers full choice and value in their air travel options.
Many capabilities enabling the sales of ancillary services already exist within the GDS environments. Airlines that adopt industry technology standards are expected to plan how to best leverage it this year. The GDSs plan to provide corporations and travel agencies the ability to shop, book and fulfill airline ancillary services to travelers by late 2010.
“It is a great achievement to have all these parties endorse the best way forward for the travel industry. We believe supporting these technology standards will benefit everyone in the travel value chain, from providers to travelers. Airlines will be able to differentiate their ancillary services offer and market it more effectively through travel agencies and to consumers,” said Philippe Chérèque - executive vice president, commercial for Amadeus.
“In business travel, lack of visibility into ancillary fees is not just a challenge for the traveler, but also the corporation that tracks and manages the total cost of each trip,” said Yannis Karmis, president of Travelocity Business. “A universally-recognized set of programs, delivering an accurate measurement of overall value for selling, tracking and accounting for ancillaries would offer transparency benefiting both airlines and travel meets the requirements of CFOs at all parties.”
“Travelport’s mission is to deliver informed choice to business and leisure travelers throughout the world – which means ensuring that each and every search results in a complete and comparable display of competitive travel options,” said Gordon Wilson, deputy chief executive officer of Travelport. “In this context, accelerating the adoption of industry-wide technology standards for airline ancillary services will bring greater transparency and choice to travelers, while enabling airlines to merchandise their products in the way that they want to sell them.”