It seems another loaded deck of cards is going to be played against a member of the global distribution system community. Air France have observed how
Lufthansa seem to have got away with their attack against GDSs in a way that has smacked travel management companies, enabled corporate fares to be hiked and lost Lufthansa minimal (if any) business.
Air France want to jump on a similar bandwagon.
Re:
Survey: 'OTAs' Unable To Meet Many Firms' Needs
Monday's article about a survey of corporate travel managers by UBS Investment Research drew immediate and opposing responses from two former managers of (online) travel (agencies) management companies ...
One of the primary reasons for the demise of commissions was the desire by airlines to reduce their distribution costs. They also felt it would take out an intermediary, bring them closer to their end customers and give themselves a competitive edge. Their strategy was not resisted by corporations who saw it as a way to commoditise this vexing and rather antique type of purchasing, or at least make it far more transparent. After all, experience showed them that stripping a product down to its component parts makes it far easier to negotiate lower prices. There were mixed feelings amongst travel management companies. It varied around the world from despair and anger to others who saw it as an opportunity to survive and thrive whilst their peers faltered under the pressure of having to justify their role in the supply chain.
The end result has proved to be fascinating and I am not sure if any of the key stakeholders got what they wanted out of it.
We all know that procurement departments have taken over buying corporate travel, but are they getting it right? Are the methodologies used in commodity purchasing appropriate and is unit price the key consideration of the day? Do they have the power and recognition in their companies to drive through mandating, and consequently do they have the ability to deliver what they promise both internally and externally?
I accept that every company is different and you will find best practice everywhere, but I think the overwhelming answer to the above questions is no. If I am right, what can be done to improve this entirely unsatisfactory situation? Please bear with me dear reader and I will have a go at explaining my point and suggesting a direction ...
The latest
Ryanair debacle where they are trying to ban the booking of their flights through travel management companies and screen scrapers set me to wonder again about their CEO Michael O'Leary.
It raised the same haunting question which I have considered with every one of his past rabid outbursts, which is: is he brilliant or is he bonkers?
