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Is There an Alternative?

May 14, 2007 By: Eric Butterman Travel Agent

There's talk of alternative GDSs making a move on traditional models–but is it just talk?

There's no question that GDSs have had to change with the times. Travel agents today expect them to provide more Internet assistance, fares they can pull up seamlessly and a plan of action for the future. Still, there has long been a rumbling that alternative GDSs would make their move.

A recent GDS panel pitted technology companies such as
Pegasus Solutions and ITA Software against traditional GDS Amadeus in what was
to be a heated debate, but the discourse seemed to bring up as many questions
as answers. More questions arose with Sabre getting purchased and going
private, along with Worldspan being consolidated into Galileo.

For now, we'll attempt to answer at least one query: Are
alternative GDSs for real, or is it time for them to get real and realize
they'll never challenge the major players?

"The airline went with the new content for fee deal,
the long-term deals and the lower-cost models," says Henry Harteveldt,
travel analyst for Forrester Research.

Henry Harteveldt

"This will make it harder for the alternative systems
to hold in the distribution landscape. Not to say it's impossible for an
alternative GDS to stay in the game, but if the traditional GDSs continue to
figure out that lower cost distribution models is not an option but a
necessity, then alternative GDSs are mostly on the outside looking in."

So then, what exactly have the periodic meetings between the
airlines and the alternative GDSs been about? Some have called them
informational, others serious—but Derek Lewitton, VP Business Development at
ITA, has gone on the record as wondering if companies like his are nothing more
than "a battering ram for (GDS) negotiations."

A Piece of the GDS Pie

Harteveldt feels there are at least a few alternative GDSs
that can gain minor slivers in the long-dominated GDS pie—such as Chicago-based
G2 SwitchWorks.

The most successful alternative GDSs work with top-tier airlines

"They might be the strongest alternative, because
they're working with major tier airlines," he says. "Radixx also has
collected a lot of airlines, but they are all second-tier level or below. G2
has broken through because they started with a more narrow focus and, coming
out of Orbitz, they were able to create credibility.

"I don't want to slight the technology of the other
players," he adds, "but they need to have a fresher approach towards
how they market themselves. G2 looks at their system as not just for an
airline, but a viable system for hotel and cars. Sometimes the others look like
airline-only distribution, when they could be more."

Speaking of airlines, one problem that won't go away for
alternative GDSs is when you have a flight requiring two carriers, maybe only
one of whom is participating with an alternative model.

"Let's say American or United went into an alternative
GDS," says Harteveldt, "but one of their alliance partners or
international carriers on the itinerary wasn't in it. Now, the travel agent
wants to sell the customer a ticket, and the alternative GDS may also need to
interface with a traditional GDS to do the request. Do you think the customer
and agent want to have to deal with more than one record, especially when two
separate reservations and paying two fares may make them miss out on an
attractive thru-fare?"

Terry Jones doesn't think so. As a former CIO of Sabre and
founder of Travelocity who's now a partner in technology consultancy Essential
Ideas, he believes it's getting near the end for alternative GDSs to become the
players they once aspired to be.

"You hear the alternative GDS talking about it again
and again," Jones says. "'In six months, we're going to make our move
and then the airlines will wonder why they'd ever stay with the GDSs.' But,
that's the problem, they never make their move."

Jones says there's one advantage alternative GDSs have been
providing, even if it was never their intention. "They've pushed the
(traditional) GDSs to make changes and improve their prices," he says.
"If GDSs had never responded to the threats they posed then there's no
question alternative GDSs would have been a factor."

Tailored for Users

Still, Michael O'Connell, Director of Corporate Business
Development for Pegasus Solutions, thinks alternative GDSs can add a more
specific tailored user experience than traditional GDSs, and says that the
Internet is one of the best places to gain ground.

"We're trying to focus on the individual customer and
use our 8-10,000 web sites for breadth of distribution," he says.
"When you look at the number of companies that are moving to online
booking opportunities, it's clear we still have spots to make money by being
problem solvers.

"Bottom line," he says, "we even support the
GDSs through the mechanisms of our sites, but see ourselves as true content
aggregators for broader distribution for travel agents."

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