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Hi David, I was wondering if you could elaborate a little more on this thought: "...for us to really take it to the next level and long-term defend ourselves a

Hi David, I was wondering if you could elaborate a little more on this thought: "...for us to really take it to the next level and long-term defend ourselves against competition from the Sabre-s of the world, we would need to build our own reservation system and start hosting airlines. We would have to NOT be just a search provider, we would have to provide the whole platform for a major airline." Is the sole reason for this the fact that the Sabre-s can always undercut you by providing the search for free or is there more to it? Do you know if Google will try to follow (or if they already have) that approach? Is it possible that the emergence of so many new online travel sites has changed the scope of opportunity for pure search providers? Thanks!

dmbaggett 11y ago
No, that's pretty much it. I recall a specific interaction I had with a South American carrier that really colored my opinion of the future of our company. We were pitching them on our search system and it was going well for a while. But then they told us that their hosting provider had offered to lower their distribution fees through travel agents by some material percentage if they used their search instead of ours... and their CFO essentially made them take the deal. I seriously doubt the proliferation of travel sites has changed the leverage of the parties much: you can still count on one hand the number of entities that offer all of search, distribution, and hosting. They will remain an oligopoly for some time to come, and will, I'm sure, continue to use that to their advantage. Regarding Google (or Alphabet, or whatever they are now), I have no idea. I didn't stay on after the merger, and frankly don't ever talk to them because every conversation I've ever had with them has been totally one-sided. (They expect me to tell them stuff, and then won't say anything... because Google secrets matter!)
- corford 11y ago
  This is why I really hope NDC (http://www.iata.org/whatwedo/airline-distribution/ndc/pages/default.aspx http://www.iata.org/whatwedo/airline-distribution/ndc/pages/...) takes off, airlines simplify their fare rules, invest in IT talent and start self hosting. Travel providers could then connect directly to an airline's NDC API for scheduling, pricing and ticketing without the need for middlemen and gatekeepers. Distribution would finally be back under the airline's control and there would be a lot more innovation.
  - skewart 11y ago
    NDC sounds awesome, and so do simplified fare rules. Are there any seriously misaligned incentives that would prevent it from happening, or is it more just general bureaucratic slowness?
    - corford 11y ago
      The NDC spec is still evolving (and suffering from a bit of mission creep). There's also the chicken and egg problem - airlines aren't going to invest in building in-house NDC based hosting and distribution platforms until there's enough market demand for it. Market demand wont appear until airlines start distributing over NDC. I'd have thought too that the GDS providers aren't exactly thrilled by the prospect of being easily cut out of the distribution chain... There will still be a need for aggregators though since not all travel providers will have the technical know-how or desire to develop their own NDC capable platforms/software. NDC would just level the playing field a bit.
  - deleted 11y ago
    [deleted]
aiiane 11y ago
Google tried it (search for Google ITA PSS).

dmbaggett 11y ago

No, that's pretty much it. I recall a specific interaction I had with a South American carrier that really colored my opinion of the future of our company. We were pitching them on our search system and it was going well for a while. But then they told us that their hosting provider had offered to lower their distribution fees through travel agents by some material percentage if they used their search instead of ours... and their CFO essentially made them take the deal. I seriously doubt the proliferation of travel sites has changed the leverage of the parties much: you can still count on one hand the number of entities that offer all of search, distribution, and hosting. They will remain an oligopoly for some time to come, and will, I'm sure, continue to use that to their advantage. Regarding Google (or Alphabet, or whatever they are now), I have no idea. I didn't stay on after the merger, and frankly don't ever talk to them because every conversation I've ever had with them has been totally one-sided. (They expect me to tell them stuff, and then won't say anything... because Google secrets matter!)

corford 11y ago
This is why I really hope NDC (http://www.iata.org/whatwedo/airline-distribution/ndc/pages/default.aspx http://www.iata.org/whatwedo/airline-distribution/ndc/pages/...) takes off, airlines simplify their fare rules, invest in IT talent and start self hosting. Travel providers could then connect directly to an airline's NDC API for scheduling, pricing and ticketing without the need for middlemen and gatekeepers. Distribution would finally be back under the airline's control and there would be a lot more innovation.
- skewart 11y ago
  NDC sounds awesome, and so do simplified fare rules. Are there any seriously misaligned incentives that would prevent it from happening, or is it more just general bureaucratic slowness?
  - corford 11y ago
    The NDC spec is still evolving (and suffering from a bit of mission creep). There's also the chicken and egg problem - airlines aren't going to invest in building in-house NDC based hosting and distribution platforms until there's enough market demand for it. Market demand wont appear until airlines start distributing over NDC. I'd have thought too that the GDS providers aren't exactly thrilled by the prospect of being easily cut out of the distribution chain... There will still be a need for aggregators though since not all travel providers will have the technical know-how or desire to develop their own NDC capable platforms/software. NDC would just level the playing field a bit.
- deleted 11y ago
  [deleted]

aiiane 11y ago

Google tried it (search for Google ITA PSS).