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Friday, August 19, 2011

Sympathy for American Airlines? I must be going soft....

American Airlines now talking Direct-Connect with American Express, no deal though | Tnooz (click link to read original TNooz article)


As I prepare to moderate the Direct Connect HOT Seat panel next week at GBTA in Denver, a light has actually come on for me. After I read the article by Kevin May at Tnooz and the comments by one of their readers, it occurred to me that I needed to post my thoughts.
Those who read my musings know that I generally come out on the "customer" side of this argument, versus the supplier side, so don't fall off your seat on this sunny Friday afternoon that I'm actually going to appear slightly sympathetic to AA.
The revelation that I've had is one of comparing what AA is doing with Farelogix back to what the hotels did with Pegasus in the late 80s. In that light, and if executed in the same way, it allows them to focus on actually being an airline, versus being in the technology/connectivity business, putting bums in seats (not literally of course - but that is like heads in beds for the hotelier) versus worrying about how they connect to Abacus, Amadeus, Apollo, Galileo, Sabre, Worldspan, plus all the OTAs, the big TMCs and some of the big tour operator wholesalers. Let Farelogix maintain all those connections for them.
it actually makes total sense when you look at it as an "AND" versus an "EITHER/OR".
And that is why the AA AMEX "carefully crafted" press release says a GDS would still have to be involved.
Because this isn't about "DIRECT" at all. It is about needing a new model that rewards each part of the value chain (oh and first, we have to value one another again - truly and honestly, not as lip service). It is also about introducing innovation and new products. Yes, they also want to be able to sell things that they don't today and they want a deeper level of connectivity down to the customer intelligence level. I do get that.
And Murray, I fully understand your sentiment that the mouse actually never asked for the new mousetrap!
Now, those who know me well know that it is my belief that given the time and the money, there is NOTHING keeping the GDS from doing the work - but the inclination to do so must have a compelling value proposition (aka Return on Investment) attached.
You have to admit that the current proposal of taking a lower fee, while investing money to build a new connection to Farelogix, isn't very appealing to Sabre or to Travelport. Hence the PR wars, indicating that their largest customers are open to this new option (and presumably would be somehow enticed to make the shift in all their internal systems (front, mid, back office, security systems, etc.). Not inconsequential stuff on their part or on the part of their various technology providers/partners. This impacts everyone - GetThere, Concur, TRX, Cornerstone, GDSx, and on and one.
We will get there. Of that I am sure.
As Jack Welch once said, gone are the days when "our fondest hope is that tomorrow looks just like yesterday".  
 The times, they are a 'changin.
Stay tuned. It is not over til the fat lady sings. Oh and Jim Davidson, a new bobblehead video about the fat lady would be an interesting crescendo to all of this once the dust settles.



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