Since the rumbling of 2006, U.S. global distribution system users have enjoyed
relative peace when it comes to accessing fares and inventory from U.S. carriers. JetBlue, Southwest and others have even boosted the comprehensiveness of several GDSs here in the United States, prompting officials from Sabre to proclaim that GDSs never had as much airline content as they do now. But with ongoing issues related to mainline and/or low-cost carriers in Canada, Germany and other parts of the world, there should be no resting on laurels. Yesterday's comments by International Air Transport Association director general Giovanni Bisignani prove this point. "Let's focus on GDSs for a minute," Bisignani said during a SITA conference, according to
a transcript posted online by IATA. "It's no secret that airlines are held hostage to GDSs."
"We sold them and were quickly taken hostage. The GDSs took advantage of their position to charge enormous fees supported by government regulation. Deregulation helped but even while airlines struggle for profitability, double digit-margins are the norm. The Internet was a golden opportunity for airlines giving us a direct contact with our customers. Combined with a revolution in yield management and distribution tools and the benefits of electronic ticketing, sales and marketing unit costs dropped 25 percent.
"But still there is need for change. Why can China TravelSky charge 50 cents for a transaction while the western GDSs charge over $4? The industry is in crisis with $130 oil. It’s time for the GDSs come to the table with efficiency gains and cost savings or we will find ways to further globalize the market."
It's hard to tell what he means by "globalize the market," but the rest is pretty clear, if one-sided.
What's the takeaway from this rhetoric? Even with the long-term deals in the United States, the clock ticks and most agreements with big U.S. carriers that are not renegotiated due to changes of control (read: Delta and Northwest) expire in 2011. It will be the third round of big airline/big GDS negotiations since U.S. GDS deregulation was effectively underway, and it already has travel management company sources saying they won't get fooled again. In 2003, it was Web-only fares; in 2006 it was "GDS New Entrants" ... what will U.S. carriers use as sticks to stir up the corporate market next time? We may start to find out soon.