Update: Meeting with American Airlines

Constructive Dialogue with AA
Made Travel Distribution Concerns on Both Sides Clearer

Scottsdale, Arizona and Toronto, Ontario - 13 December 2010: ARTA and ARTA Canada members' interests were well-represented last week in a private meeting with American Airlines' distribution management and sales officials.

The meeting covered a wide range of topics, including the underlying issues and status of the current dispute with Orbitz and Travelport and the resulting Booking Source Premium Surcharges imposed by AA in various countries on certain Travelport GDS subscribers.

The ARTA groups expressed their individual and collective concerns regarding the impact of the surcharges, the collection process using Agency Debit Memos (ADMs) via IATA's BSPs, and the overall thrust of AA's direct connect strategy.

As for the surcharges, AA's tactical response was one of cost recovery, however, it was revealed by AA that the surcharge itself was only a fraction of the huge increases imposed by Travelport on AA, leaving AA to absorb the lion's share of the Travelport fee hikes. AA also made it clear that what was a fairly isolated commercial dispute between itself and Travelport-majority-owned Orbitz, soon became a travel industry flashpoint because of retaliatory action taken by Travelport.

As for the IATA/BSP ADM surcharge collection process, AA advised that it has discussed the matter with IATA and reviewed the policies outlined in IATA Resolution 850m. AA feels that it is abiding by the terms of the resolution and that more information will be made available soon. The impact on ARTA Canada members was discussed, and AA seemed to appreciate and make note of these concerns.

The ARTA groups asked AA to clarify the meaning of direct connect, as some in the industry have speculated that such a plan would cause sales intermediaries to have different, non-complementary data and booking platforms for multiple airlines. AA explained that this was not the case and that AA is endeavoring to move its large scale distributors to a more robust, cost-effective, and more flexible data feed of AA content which is system agnostic (any system can participate, including the GDSs). The new delivery environment would close the gap between the full array of content, customization, and traveller options available on AA.com, and the limited, archaic handling of AA's array of product and services as displayed and sold in the GDSs.

AA went on to clarify that it was not just a matter of GDSs being able (or claiming to be able) to sell ancillary travel options, but rather, a complete change in the manner that travellers are identified, categorized, recognized as to their status with AA, and then presented with a series of customized and tailor-made offers, including the possibility of one-to-one pricing.

It became clear to the ARTA groups that there is a sea change in the works, not just with AA, which will dramatically enable airlines and sales intermediaries to mutually benefit from wider, more elegant content delivery and that the GDSs simply must adapt 30 year old technology to meet the needs of a web-enabled, graphical, and customized travel sale and purchase experience. ARTA suggested that AA explain these concerns to the trade more clearly and more simply and that better education of stakeholders on these complex matters would help explain that AA was pushing for GDS transformation, not GDS confrontation.

The parties felt that the afternoon was time well-spent. The ARTA groups advised that they stood ready to assist members with understanding AA's need to move travel distribution beyond the green screen, hopefully with the collaboration and cooperation of the GDS community. ARTA and ARTA Canada made it clear, however, that if the GDSs are unwilling to retool their systems and adapt to new sales methods, options, and processes, then it may be time to reconsider a supplier-wide, neutral, and web-enhanced booking platform alternative.

About ARTA 

ARTA has always been at the forefront of those industry changes which have strengthened the agency community. Founded in 1963, and for the past 47 years, the Association of Retail Travel Agents is the largest non-profit association in North America that represents travel agents exclusively. 

ARTA is headquartered in Scottsdale, Arizona. ARTA is the strategic partner of Canadian-based ARTA Canada. For more information about ARTA, please contact Ms. Pat Funk, ARTA's Executive Director, at 1-866-369-8969 or by e-mail to pat@artaonline.com.

About ARTA Canada 

ARTA Canada is the largest non-profit federally incorporated professional association of travel retailers in Canada, the members of which consist exclusively of travel agencies and travel agents. In addition to advocating fair and equitable treatment of travel consumers, ARTA Canada represents the commercial and strategic interests of its member travel agencies and travel agents in a variety of national and provincial domains including regulatory and legislative matters, automation, technology, sales and marketing, and distribution.

ARTA Canada is based in Toronto and is the strategic partner in Canada of the U.S.-based Association of Retail Travel Agents (ARTA). ARTA Canada is the Canadian member of UFTAA, the United Federation of Travel Agents' Associations.

Complete details about ARTA Canada's new $99 membership campaign for 2011 and an online ARTA Canada membership application and secure payment are available on its web site at www.artacanada.ca/join.

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ARTA Canada  |  61 Hayden Street  |  Toronto, Ontario, Canada  |  M4Y 2P2