16th September, 2020
Key aspects of airline indirect distribution including GDS surcharge, distribution of content, booking flow of shop, order, pay etc. are being assessed in Europe.
Post the recent deal between the Air France-KLM group and Amadeus and the news of Lufthansa opting to hike GDS surcharge by 30% or so, the timing as well as the nature of the same is being probed.
Commenting on the recent Air France-KLM and Amadeus deal, experienced airline distribution and technology executive, Ann Cederhall said, “Private channel is not a new concept and kudos if the administration of the deals can easily be managed by the airline. The agent will in the private channel get a discount on the GDS surcharge and only pay a few euros for the NDC content, this is a first as I see it.”
“What would be interesting to understand is how much better the content is and is it worth paying for. Another observation is the parity, that the access will be the same as for any other intermediary or GDS,” said Ann, who added that a significant part of NDC is about control, in the GDS the airlines have little or no control mechanisms. As for the GDS and the agent community. She said, “My understanding when reading the article is that Amadeus takes the step towards becoming an aggregator and the assumption here is that it would allow any integration the agent requires e.g. a low-cost airline? The whole purpose of using an aggregator is the ability to integrate any content of choice. Slightly worrying in this release are the comments on how "there may be agents struggling with the content and servicing of the content.”
The industry has questioned the timing of Lufthansa’s latest move. On Lufthansa’s move, Ann said, “The hiking of the LHG surcharge is bold but might be the right timing to do so as they strengthen their role as the forerunner of disrupting GDS distribution. It will be most interesting to follow this development especially as SQ are rolling out their program simultaneously.”
“Any move towards servicing the customer in the whole digital journey is a step forward and I look forward to following this development with interest,” said Ann.
Related link: Delving into the Air France-KLM and Amadeus deal, what does it signify?
By Ritesh Gupta