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ARTA Meets With American: Sea Change in Works?December 13, 2010 By: George Dooley
The confrontation between American Airlines and Travelport over AA’s Booking Source Premium surcharges took a new twist as ARTA and ARTA Canada reported a meeting with American Airlines last week to discuss the dispute between AA, Travelport and Orbitz. The two retail agency groups said the private meeting was with AA’s distribution management and sales officials. AA imposed the Booking Source Premium surcharges in various countries on some Travelport GDS subscribers.
“It became clear to the ARTA groups that there is a sea change in the works, not just with AA, which will dramatically enable airlines and sales intermediaries to mutually benefit from wider, more elegant content delivery and that the GDSs simply must adapt 30 year old technology to meet the needs of a web-enabled, graphical, and customized travel sale and purchase experience,” ARTA said.
The ARTA groups said they expressed their individual and collective concerns regarding the impact of the surcharges, the collection process using Agency Debit Memos (ADMs) via IATA's BSPs, and the overall thrust of AA's direct connect strategy.
As for the surcharges, AA's tactical response was one of cost recovery, however, it was revealed by AA that the surcharge itself represented only a fraction of the huge increases imposed by Travelport on AA, leaving AA to absorb the lion's share of the Travelport fee hikes, according to ARTA.
“AA also made it clear that what was a fairly isolated commercial dispute between itself and Travelport-majority-owned Orbitz, soon became a travel industry flashpoint because of retaliatory action taken by Travelport,” ARTA said.
As for the IATA/BSP ADM surcharge collection process, AA advised ARTA that it has discussed the matter with IATA and reviewed the policies outlined in IATA Resolution 850M. “AA feels that it is abiding by the terms of the resolution and that more information will be made available soon. The impact on ARTA Canada members was discussed, and AA seemed to appreciate and make note of these concerns,” ARTA reported.
The ARTA groups asked AA to clarify the meaning of direct connect, as ?some in the industry have speculated that such a plan would cause sales ?intermediaries to have different, non-complementary data and booking ?platforms for multiple airlines.
“AA explained that this was not the case and that AA is endeavoring to move its large scale distributors to a more robust, cost-effective, and more flexible data feed of AA content which is system agnostic (any system can participate, including the GDSs),” ARTA said. “The new delivery environment would close the gap between the full array of ?content, customization, and traveller options available on AA.com, and the ?limited, archaic handling of AA's array of product and services as displayed ?and sold in the GDSs."
??“AA went on to clarify that it was not just a matter of GDSs being able (or ?claiming to be able) to sell ancillary travel options, but rather, a complete ?change in the manner that travellers are identified, categorized, ?recognized as to their status with AA, and then presented with a series of ?customized and tailor-made offers, including the possibility of one-to-one ?pricing,” ARTA said in its analysis.
“ARTA suggested that AA explain these concerns to the trade more clearly and more simply and that better education of stakeholders on these complex matters would help explain that AA was pushing for GDS transformation, not GDS confrontation,” ARTA said.?? ARTA said it stood ready to assist members with understanding AA's ?need to ”move travel distribution beyond the green screen, hopefully with ?the collaboration and cooperation of the GDS community.”
ARTA and ARTA Canada said that they made it clear that if the GDSs are unwilling to retool their systems and adapt to new sales methods, options, and processes, ?then it “may be time to reconsider a supplier-wide, neutral, and web-?enhanced booking platform alternative,” ARTA said. Visit www.ARTAonline.com.