Airline Declaration Of Indepedence

While I don't believe that life as we know it will end once the new Declaration of Independence is signed, otherwise known as AA's new contract with Sabre, I do believe it will mark the beginning of a long slow road of change for corporate agencies. AA wants and will get greater control over their content and will begin to "turn off" that content to non-valued distributors. I don't see a scenario today where a corporate agency would be considered non-valued. Online leisure agencies are definitely in the cross hairs and airlines are starting to pull the trigger. [more]

However, don't think that it's all rainbows and butterflies for corporate agencies. Airlines will use their new found flexibility to push corporate agencies towards a more direct connect model. This event goes way beyond AA as every other major airline has got AA's back in this fight with contract dates set for the next few years. Some time in September, your once-friendly airline rep will call to schedule an "uncomfortable" conversation. Either start buying direct or airline content in the form of flight availability and fares will slowly disappear. And I'm not confident that a reasonable incentive check is part of the plan. It can't be a zero sum game for the airlines. So what's agency to do?

You have two choices. The first scenario I call "Back to the Future." Sit on the sidelines and hope it all blows over just as it did in 2006. Believe in your heart that AA's bluffing and this is all just big boy negotiations between elephants. Sam and Tom will go play a round of golf at Dallas Country Club and at the 19th hole, a deal will be struck that will make all this go away for another three to five years. I like it. The second scenario I call Reality. Assume AA will negotiate a new deal with Sabre but will obtain greater control over distribution and start pressuring both corporate and leisure agencies to book direct. Obviously, I put a higher probability on scenario two. Steps you should take today in anticipation of scenario two, I'll save for a future blog. Time to get back to work.