Agents Could Boost Global Ancillary Revenue to $100 Billion

If travel agencies and online travel agents become integral components of ancillary revenue distribution today’s $32.5 billion projected market could jump to $100 billion, according to a new Amadeus/IdeaWorks study "The ABCs of EMDs (Electronic Miscellaneous Documents)." The report describes how airlines and automation vendors will manage a la carte transactions with travel agencies -and the opportunities for agents.

EMDs (Electronic Miscellaneous Documents) function like ancillary revenue e-tickets and provide proof-of-purchase for a la carte services bought through travel agencies and corporate travel departments, the study notes, and for direct sales by airlines through websites and ticketing locations.

The introduction of EMD into the travel marketplace is only now in its earliest stages, the study notes."The adoption of an industry-wide standard calls for 230 airlines to be capable of using EMDs before the end of 2012, and that EMDs should be the only method to settle payments between airlines and travel agencies by the end of 2013."

"Three airlines (Finnair, Iberia and Japan Airlines) have already used EMDs for travel agency transactions and 25 airlines have developed the capability to use their first EMD. Creating consistency for the distribution of a la carte services through every possible channel is a daunting task for airlines and vendors throughout the world," the study says.
 
"Equipping travel agents with more information and providing retail capabilities will reduce the element of surprise and help create happier customers. Ultimately, the outcome for a perennially profit-poor airline industry will be better ancillary revenue results courtesy of wider acceptance and wider distribution of a la carte initiatives."

Similar to paying the check in a roadside diner, a la carte pricing began in the airline industry as a cash-only business, the study notes. "The need to track a la carte transactions through Global Distribution Systems (GDS) and airline Computer Reservation Systems (CRS) arose after traditional airlines embraced the ancillary revenue revolution.

The study says the world’s airlines are projected to generate $32.5 billion worldwide from ancillary revenue activity during 2011. "It’s a big number which will only grow much larger as the global network of travel agencies becomes a network of ancillary revenue retailers. The largest share of air travel is still booked by travel agents using a GDS - - more than 60 percent of airline tickets sold worldwide. It’s certainly possible today’s $32.5 billion projection could jump to $100 billion in the future."

The full report is available at the IdeaWorks website: www.IdeaworksCompany.com

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