I landed in the Middle East on Tuesday morning (local time) and my Blackberry awoke to a surge of messages about an article published by Tnooz
about the DOJ making calls to certain Farelogix customers. After reading the article, I felt compelled to respond to the comments made by the Sabre representative.
To the Sabre comment about the “evolution of the Farelogix business model to one of content fragmentation,” I offer the following three points:
1. I can confidently say that the Farelogix business model has been consistent from the first day I joined the company, over four years ago. As a matter of fact, on two separate occasions, Farelogix invited and hosted Sabre product managers and executives in our Miami office where we provided full-disclosure product demos. We clearly reviewed with Sabre how the FLX Platform technology accesses and manages multiple content sources, including all GDS, Web, private fares, and direct supplier content. So maybe the “evolution” comment was related to the fact that since that time, Farelogix has actually developed some solid customer traction with our business model. Perhaps “fragmentation” is simply a code word for “lower cost competition."
2. The Farelogix FLX Platform for travel agencies doesn’t create fragmentation…rather, it is a response to it. The FLX platform provides a low-cost solution to solve the challenge of industry content fragmentation, which by the way has existed in our industry for years, despite the “GDS single-source claims." Managing multi-content sources is a high-cost and complex challenge faced by literally every travel agency, TMC, and consolidator who is attempting to do business on a global scale. To say otherwise, is simply a slight to those companies struggling with this challenge every day. Each year, these travel management companies spend hundreds of thousands of dollars in added personnel and technology overhead that must be passed on to corporate and leisure consumers as higher service and support costs.
3. Let’s face it, content fragmentation is only going to get worse, especially with suppliers and agencies working diligently to differentiate themselves and their products. And, for anyone to assume that Farelogix is a major cause of this increased industry fragmentation, however flattering it would be, is simply quite overreaching to say the least.
And, as response to the Sabre comment, “what became clear was an attempt to free ride off our database and systems,” my initial response is: “I don’t understand the comment." Perhaps there is perception out there that somehow Farelogix is utilizing the Sabre system to shop and search, gather content, and then use that data to make bookings in another source system? Or that the Farelogix system integrates as a “sniffer” application connected to the Sabre GDS and only “activates” when certain agency transactions are requested? If any of this were the case, I would actually agree with Sabre that those actions, in my opinion, would in fact constitute a “free ride." But, the reality is that the Farelogix FLX Platform technology does none of the above.
Simply stated, FLX does not and is not "free-riding" on either the Sabre content or any Sabre investment in the Sabre product. In fact, the Farelogix software does not use nor in any way depend upon Sabre or any GDS. FLX's simple objective is to be able to operate side-by-side existing GDS solutions by providing value-added service and functionality. Instead of serving its customers better and more efficiently, Sabre's response to this enhanced competition from FLX was to harm its customers by stifling competition--and Sabre is now trying to justify it by claiming that FLX is "free-riding."
Lastly, for the record, let me state what the Farelogix FLX Platform actually does in its simplest form: It connects to the customer-requested content sources (GDS, web, direct, private) in a well documented, consistent, legal, and normalized manner allowing the user to apply a predetermined and dynamic set of business rules to the data. It provides a superPNR to manage bookings and reservations from multiple sources, and provides a way for agencies to get all this information into their back office systems. All of this results in a quantifiable increase in TMC productivity levels and reduced costs for the travel agencies, and not to mention more content choices for the consumer or corporate traveler.
The marketplace impact of the FLX product has been to reduce the ability of the legacy GDSs to lock in customers due to their incumbency, particularly Sabre's. It gives to customers a significantly lower-cost solution that allows them to be more responsive to their consumer needs. By terminating the developer agreement with FLX
, Sabre revealed its true purpose and intent--to protect and maintain its market dominance at the expense of Sabre's customers and their consumers.