Airlines are being “held back” by “clunky” global distribution systems (GDSs) used by travel agents, according to the head of the International Air Transport Association.
IATA director general Tony Tyler told the Air Transport IT Summit in Brussels on Thursday: “The computer reservations systems of the 1970s put aviation decades ahead of other consumer industries. [But] the GDS model is now holding us back.
“New models are facilitating customer-friendly interaction in almost every online activity. But the GDS model is too clunky to adapt easily to fare unbundling and merchandising.”
He said IATA is working on a global standard for a “new distribution capability” that would “revolutionise” sales. The standard will be presented at IATA’s World Passenger Symposium in October.
Tyler said the aim was not to bypass GDSs. He said: “The GDSs have an important role to play in working with us to optimise this. . . The intention is to enable product differentiation through all distribution channels.”
He said the way airlines’ work with agents would inevitably change.
Speaking outside the conference, Tyler said: “Travel agents cannot expect airlines to stand still as the world around changes. Smart travel agents recognise this and are adapting their business models.”
Part of the change would involve airlines utilising more of the passenger information they hold.
The IATA chief said: “We have not understood the importance of managing the information we have about customers’ travel patterns.
“Instead, we have allowed much of that information to reside with distributors of our product who have made a healthy profit aggregating and selling back to airlines their own data.”
Tyler said cost was the driving force behind the shift. Referring to “our partners in the supply chain” he said: “There is natural tension because their revenues are our costs.
“We expect an aggregate profit of just $3 billion on revenues of $631 billion this year – a 0.5% margin. We see European carriers posting losses of $1.1 billion. Many of our partners in the aviation supply chain do much better.”