But, often at these events it is about internal IT rather than external technology.

As a precursor to this year’s event, I am taking a look at some of the underlying questions that perhaps are not being answered – such as, is change coming to airline distribution?

I believe that despite the best efforts of GDSs and travel agents to retain the status quo, reformation – if not a slow revolution – is coming and it’s not pretty.

IATA‘s NDC (New Distribution Capability) has become a touchstone for the reform of airline passenger distribution change.

In my view, as a long time participant in distribution, I ask myself whether the proposed reforms are, frankly, enough to bring the industry to even the current state of the art required.

To this end, I have pulled together what I believe are four significant questions that need to be answered.

1. Are the airlines serious about real reform?
2. Is the anti-reform lobby just about protecting the status quo?
3. Can the airline marketplace absorb change (in other words: are they capable of handling it and if so in what time frame?)?
4. Will someone else bring change/reform to the marketplace?

Question 1

This is relatively easy to answer. Yes, the airlines are serious about reform.

IATA’s efforts for NDC may not be going through the easiest of processes, let’s face it – but it is clear that there is a way for airlines to make money from operations in a manner and at a level that even a few years ago would not be seen to be possible.

The airlines have found a way to reach profitability. Despite much of the doom and gloom, recent statistics from the large airlines indicate a healthier future.

Airlines no longer speak of profit but Return On Capital invested. To achieve reform and to make the airline distribution system – well, modern – the archaic message standards and structures need to be swept away.

Question 2

This is a much harder dilemma to answer. The two largest GDS companies, Amadeus and Sabre, are somewhat schizophrenic when it comes to distribution reform.

One the one hand the cash cow of the GDS business should be protected, however both these players stand to see considerable revenue increases from the PSS side of the business.

Amadeus’s cautious support of NDC in public belies their behind the scenes role in being heavily involved with NDC. At the recent working group sessions held last week in Montreal, every single unit had at least one Amadeus person involved.

Headquarters is taking no chances. However the anti-lobby does have some good points that need to be overcome for NDC. So much of the current infrastructure of travel distribution is built on the legacy messaging and workflow standards of the airlines. To change the core is a massive task.

That so much depends on the airline structure is why the GDSs and non-air marketplaces are so edgy about the reformation.

Question 3

An issue that so far I have not heard anyone ask, let alone answer, yet I believe it needs debating.

Frankly, I think the airline distribution community both direct and indirect is hard pressed to absorb the level of change necessary to bring NDC into the world.

There is a clear divide in my opinion between the airlines who can lead this type of change (driven primarily by the North American mega carriers and by IAG and Lufthansa group) and the smaller, now dwindling group, of full service independent carriers.

With alliances now controlling the majority of airline travel worldwide, the role of the independent or niche carrier is threatened. LCCs of course continue to power ahead but they are becoming more and more like the network carriers.

The legacy carriers as represented by IATA have relied on the GDSs to do their bidding particularly in the creation of standards. This time around, airlines are attempting to go it alone without the full participation of the GDSs.

Striking out on their own and trying to reach consensus in the traditional manner is proving to be quite hard. Therefore, does IATA truly represent the whole industry? Indeed, is it equipped to handle this level of change and get the consensus necessary for buy in from the airlines?

I suspect this is not an answer that will come easily.

Question 4

The classic elephant in the room-type dilemma. Will change be forced onto the formerly closed world of the airlines? I believe the answer is yes.

We live in an AGFA world – Apple, Google, Facebook and Amazon. This cannot be ignored.

The disintegration of the open web into walled gardens has been a recent characteristic that has really taken hold. Are we really able to have a fully open web or must we go through the gatekeepers to these walled gardens.

That Google is all powerful and their might is a very scary concept. The nice face of Google has been replaced by a more sinister and controlling hand on the neck of the Industry.

The “tax” levied by Google through its advertising charges and many forms of revenue generation is really quite spectacular.

That the AGFA world is a different one than the airlines currently exist in will ultimately cause a clash. Some of that friction has already surfaced.

Two years ago at the 2011 SITA IT Summit, Lufthansa Group’s CIO openly questioned the wisdom of any airline giving its data for inclusion into Google Fare Search.

Today that door has already been blown open and many airlines are already participating. So much for the control!

The world of travel technology is one marked by constant change – this time reformation is fundamental and deep. And not a moment too soon.

The airlines have the opportunity to keep some manner of control over distribution, but I believe that that control is quite low. The power of the big four web players dwarfs the ability of the airline community to manage their own distribution.

The tax to be paid in advertising charges will be high and permanent.

NB: Blue sky aeroplane image via Shutterstock.

NB2: Disclosure – author is a guest of SITA which supplied accommodation/travel for the event.

The particular slant I took was to look at the future of discipline, not least because I believe we are seeing yet another disruptive cycle when it comes to consumer behaviour and, in particular, their relationship with social media.

But it’s not just me – others are seeing it too.

Here, therefore, is my view on what is happening in social media.

Consider whether you agree with me that Facebook is not really a media platform and that users in mature markets are moving back to more normal behaviors such as chat and communication – which was a major driver for the use of Facebook in the first place.

I am sure that the die hard faithful will slam me for predicting the decline of Facebook. I see it as a positive sign.

The consumer continues to mature and evolve. What he doesn’t want is to be gamed. I believe that Mark Zuckerberg and co (similar to Google) have played the consumer, and now consumers are starting to rebel.

The amount of junk is diminishing the trust and reliance on Facebook and it is no longer able to make the claims it does about its trustworthiness.

AND the fact that the company just keep tinkering with it.

So, let’s accept that social media reaching an interesting part its life cycle and is almost certainly maturing.

It is not going away, of course, though it is going to change. But woe betide anyone who takes the consumer for granted.

In his presentation, was a “Before” and “After”-type view of how the carrier views the Passenger Service System (PSS).

Wallis presented a different view from the conventional world that has been pursued in airline IT for some time, being that the PSS is at the heart of the airline’s customer operations.

While this will not fundamentally change – you need a PSS to operate any airline – the change from Air Canada represents a view that the one size fits everything model is not valid for every airline and decidedly not for carriers wanting to differentiate themselves from the herd.

The concept that the PSS needs to be one single homogenous solution using common technology with the GDS platform has long been espoused by both Sabre and Amadeus.

Yet the very nature of the dissatisfaction (from a technical perspective) that the airlines have with the GDS can apply to the core PSS systems. If one looks back at the investments made by the airlines over the past 17 years, much of it has been in web-based technologies and associated non-core inventory systems.

This new direction from Air Canada – as seen in part with its relationship with Travelport using the Agencia platform – represents a different approach and perhaps bears some consideration by other airlines who are evaluating their PSS strategies.

As airlines take a different approach to ancillaries and indeed to the marketing of their products, a one size fits all approach clearly causes many issues.

The scramble for competitive advantage between airlines will become more and more acute as they aim for de-commoditization of their product lines. Looking at the new architecture for Air Canada – you can see where it is headed.

First slide represents what it has in place today.

Airlines have been very frustrated with the narrow pipes they are forced to use for intermediary distribution. American Airline’s Cory Garner, speaking via a taped video interview, explained the need for “fibre optic” pipes to provide the best content to all its travel agency partners, particularly the corporates.

He continued:

“A travel agency, a corporate travel agency that uses a GDS on the back end is going to need a fibre optic pipe to get access to the best content that we have. And we want a corporate travel agency to have the best content we have.

“And that means we need to get the direct connect pipe, piped in behind the GDS so that the corporate customers can use that content.”

For the consumer more commonly used to a comparison shopping experience, this change in direction will also cause a certain degree of consternation.

The useful lowest fare shopping tools will become more complicated and very hard to decode for the causal shopper. This is not just a user experience issue either

Airlines will take different approaches to their PSS strategy – some will continue to build solutions which are unique, like American and Air Canada.

Others will segment the PSS into inventory and selling-based systems. Others unsure of how to handle it (typically smaller carriers) will be happier to let the experts of the PSS vendors handle it for them.

Which approach is right for which airline is as unique as the airlines themselves. In the case of Air Canada, we can see that it is pursuing a very clear and independent solution.

At the Farelogix meeting, the Florida-based company announced a new tool for managing all forms of distribution internal and external. Called Airline Commerce Gateway, it creates a different model for how distribution is managed.

Putting itself into that market squarely may change how the GDS replacement service is perceived by the airlines from a technology point of view. This potentially is a real harbinger of a change to the way that airlines want to connect to distribution channels as well as better managing their own internal systems.

I believe that we have to take the view that the days of a homogeneous air transport product and content system is over, as airlines want solutions that will be differentiated and numerous.

The challenge for intermediaries will be how to present AND manage customer based solutions from different suppliers when faced by a plethora of different commercial distribution models.

Travel agencies and airlines are going to have to equip themselves with better access to content/product as well as arming themselves with new tools to deliver value to their users – direct as well as indirect.

PSS, GDSs, as well as third party providers of these tools like Datalex and OpenJaw Technologies, are stepping up their game.

Welcome to the real world of retailing.

NB: Disclosure – LUTE Technologies is a partner of Farelogix.

It also creates essentially a closed shop for distribution of airline products both direct and to the travel agency community.

What may go down in history as the second St Valentine’s Day massacre, the merger creates an elite number of players who can perform in a closed system.

I say closed because the barriers to entry are now extremely high and there will be very little appetite for a new airline to enter the market.

With Southwest as the traditional market disrupter for more than 20 years deciding not to engage in large-scale expansion over the next five years, and the existing players essentially only buying replacement aircraft, the US air travel market is settling in for a long period of profitability while at the same time undergoing some radical changes internally.

The change in distribution technology particularly via intermediaries is both desired and necessary. Traditional PSS and GDS tools are not, in my opinion, sufficient for a differentiated product set from few supplier players.

With airlines now able to differentiate products and services across the board, both from a technology and marketing perspective, de-commoditisation of the market is the newest characteristic.

Wider context

AA’s managing director of sales and distribution, Cory Garner, who has been a champion in recent years for de-commoditisation, recently likened the issue of the traditional GDS/PSS infrastructure to that of using old narrow pipes to deliver expanded differentiated content.

He argues that what is necessary are new pipes (bigger and more advanced) to deliver new products individually to dynamic shopping queries.

The drivers behind IATA’s NDC and of course in recent history the technical basis for the airlines vs GDSs arguments are product differentiation, personalization and ancillary products. As airlines found out to their cost, traditional GDS and PSS technology creates barriers to the airlines’ goals.

The newly merged airline, like its fellow network mega carrier brothers, will have many challenges ahead of it as it under goes the slow and oft painful process of integration.

But with a 3+1 market (three network airlines and one non-network carrier), the demand for differentiation will place many requirements on the various sales channels for product differentiation.

It is my prediction therefore that the airlines who are (now and will be for many years) in a supplier dominant position – will seek to ensure that all channels distribute their content in a consistent manner without homogenizing their respective positions.

A tough challenge ahead indeed.

Relying on new technology and an open environment for the distribution of their products will create challenges for the intermediary players.

With their new found dominant positions, the airlines will put demands on the intermediaries and their adjunct technology providers (including GDSs) that will add significant complexity and therefore cost to the channel.

True, new players will emerge.

Indeed, the likes of Google must be really happy with the merger announcement. However, overall there is logic that states for the majority of airline products purchased in the marketplace, creating a truly open neutral shopping experience will be a very hard challenge with this new world order.

For agents, the quick and the efficient and the big will come to dominate as well. For the consumer, low-cost will be a distant memory.

NB: US Airways image via Shutterstock.

For years we have been hearing that THIS is the year for mobile in travel. We are probably beyond that stage. So is the marriage working and are we all having a good time?

If you have a simple application such as HotelTonight, then this marriage works. It is straightforward simple and valuable. But can a large online travel agency’s depth and breadth of product match that?

One could argue that the perception that you have the WHOLE web in the palm of your hand is false.

Apple and others are telling us to abandon our laptops and rely on the cloud. The mobile telcos have been telling us how wonderful 4G is (mostly LTE which in reality is 3.5G). Sadly this doesn’t all fit together as well as we are led to believe, and things are not going to get a lot faster for quite a while.

Those of you who are using 4G today in different markets are finding a few things. It’s perhaps not as fast as you like. Service is spotty and erratic. Roaming charges are a bear, wifi still beats it, so adoption of cellular enabled tablets has been less than stellar.

While early reports of up to 50% of iPads would be configured as 3G and 4G enabled, the actual number is fewer. It is estimated that less than 20% of all iPads are cellular equipped and most of those are accessing wifi rather than cellular networks.

Last year, Localytics app analytics assessed the market for app usage and determined that only 6% of all app usage was via cellular connectivity.

While that will rise, it will be constrained by the low number of cellular enabled devices and the continued poor experience. On the other hand consumers are being pushed hard for mobile data usage and a meshed environment of cloud based and thin client (mobile device) access and the use of cellular connectivity.

Implications for travel

For travel this means that not only will cloud-based apps and mobile websites be constrained, but heavy users will stick to web top [ie. full browser like sessions] rather than pure mobile sessions (app or mobile web).

Indeed the users will be quite happy with mobile hotspots, mifi devices and USB sticks rather than app based inteeaction. Tablets make the standard browser experience a lot easier, and we see mobile usage on tablets for travel applications to be more conventional browser-based experience rather than an app-based experience.

Data roaming charges and the complexity of finding and logging onto wifi networks also means constraint in mobile usage. The poor quality of data networks in mobile will also restrict users who will feel unsure of trusting their commerce applications to give them a totally secure, cheap (meaning free) and reliable service while in trip.

So before the howls or protest come in, there are a few more factors to be considered. Many users in different parts of the world are on pre-paid or pay as you go plans where data is very expensive and metered, which will constrain mcommerce applications.

Downloads of travel applications are very low in the overall scheme of things (go to Appannie and look at the travel applications categories versus the other categories). Strip out local transportation, weather and mapping and you get some pretty poor results and some of the numbers are bordering on insignificant.

As a result, search and social will continue to shine but not ecommerce on mobile aka mcommerce. I challenge anyone to show me they are doing verifiable business on mobile, despite high interest. Typical results what I believe that will be seen are:

• Different session profiles – shorter and large numbers of abandoned sessions
• Many zombie downloads – ie downloaded but never used
• Declining numbers of annual downloads as the marketplace gets saturated
• Low transaction numbers
• Many applications are poorly designed
• Lack of attention to data protection.

The moral of the story is be careful what you wish for. Mobile is cool, but adoption and usage is very different from the typical browser based web top environment. For Travel where complexity reigns, migrating to mobile app from web top will be challenging

This is a marriage that we know will be long term wont necessarily be happy for the couple (Mr Mobile and Ms Cloud).

And, for sure, users will get tired of the squabbling between the various parties: telcos, app vendors, device providers not to mention product purveyors.

NB: Unhappy marriage image via Shutterstock.

Tech accessorizer Incase has recently announced the EO Travel, a new line of luggage targeting the short-term, gadget-heavy traveler. The suitcase line features many features for the tech-toting traveler, such as an expandable waist and specially-made slots for their devices.

Incase markets the new line as “custom built for a new generation whose approach to travel is defined by simplicity and connectivity. Built to carry-on, this five-piece collection caters to the evolving traveler who relies on personal technology for business, pleasure and inspiration. Each EO Travel bag combines smart organization and dependable protection to make the travel experience easier, safer and more efficient.”

THE PRODUCT: The Incase EO Travel Roller ($249.99)

The EO Travel Roller is a midsize carry-on for a short trip or long weekend. It’s one in a series of on-board luggage recently announced by Incase that includes a hardshell roller, a rolling brief, a backpack, and a duffel bag.

THE PROMISE: “An onboard luggage piece with space for a 3-day trip”

The product is supposed to be a combined luggage for a 3 day trip. They are selling the convenience of an onboard luggage piece that also safely totes travelers’ most sensitive gadgets.

Convenience and size

Several problems on this front. The case is designed to be a “convertible” case, i.e. a combined suitcase and laptop bag. It kinda works. But the compromises don’t always meet the fitness for purpose. I can see this as a female single carry on bag so they don’t have to dump the handbag in order to meet the 2 bag US carry-on limit.

For the famous RyanAir and European single bag limit – it should work.  Probably doesn’t work for someone like myself who is frequently away on longer, sometimes multi-week trips.

THE HOOK: “Expandable and durable”

The Incase EO Roller is supposed to have several killer features:

Expandable: Theoretically you can carry a Mac laptop and an iPad.

Durable: The suitcase has waterproof exterior, but is on one side only.

In my opinion – this hook is the not strong enough to be compelling.

THE FEATURES: “Tech pockets and weather resistant”

1.  Padded sleeve fits up to 17″ MacBook Pro.
2.  Slip pocket for iPad.
3.  Main compartment expands 35%.
4.  Custom wheels for a smooth ride.
5.  Triple-coated weather-resistant front panel.

One major thing it is missing for business travelers is the ability to attach a second bag to it – the piggy back hook that allows for a variable amount of carry-ons.

THE TRUTH: “Some nice features and lots of compromise”

It has some nice features – but they are spoiled by some compromises. Specifically:

• The inconsistency of top loading vs bottom loading.
• The recessed pouch on the bottom was a mistake – it should be on  the top.
• Maneuverability leave a lot to be desired. Its too heavy for such a small case.
• Getting the hang of this new luggage’s quirks meant that I had a bit of a hard time at the security lanes.

Value

Based on the assumption of what the price is officially from the website – assumed price is $249.99. If the discounts are normally down to $150-199 then its reasonable. At $250 its a bit pricey for a weekender-type bag.

Mobility + Size

Its quite heavy – I think they could make it a lot lighter. A suitcase of this type could be a lot lighter with the use of different materials.

The suitcase capacity is also not big enough. Although I tend to travel for longer periods of time so my judgement is colored in that light. The case itself could be about 1-2 inches longer.

I also don’t like the two steep bars intruding into the suitcase area. Expanded, the case can work for a 3 night or, at a stretch, for a guy on a 4-night trip. But then it would have issues of fitting into the overhead bins, so it’s best to stick to the designed-for 3 day trip.

Intuitive

Could do better. Now this could be just me but I found myself not using the features in a simple order. Too much fussing with the zippers and pockets made usage more aggravating than necessary. However I think I could get used to this after having some time to acclimate to a new suitcase.

Features

These are over all quite good. The iPad2 case was a surprise – not sure it works for an iPad 1 definitely does work for an iPad 2 and 3.

Durability

I tested this on two trips via four airports, including a connection. It seems to work well. The feel seems to be good. Wheels should be further out – they are too close together makes for unwieldy when you are dashing through the airport.

The suitcase’s material looks like it wouldn’t survive a trip in the hold if it went as checked baggage – say if all of the overheads were full and you were forced to check the bag. This is a pet peeve of mine – that designers think they design for carry-on only. That does not always happen and I think this will have issues with Velcro touching it.

I also wouldn’t like to see what happens when it gets wet!

Fitness for purpose

I define fitness for purpose as a weekender combined replacement for a dedicated laptop bag and suitcase. It’s good for perhaps 2nights. Not more without the expander which would lead to unwieldy compromises.

Dragging it round the house with the Expander full was even less maneuverable. I would like to see a version of the 22 inch that I use from Swiss Army – which remains my preferred suitcase of choice. (I am eyeing a Briggs and Reilly as a replacement.)

Quality

If this is a true production quality version – I would say the zippers need to be a bit stronger. I didn’t try the “destruct test” but I suspect the zippers might not be quite as robust. Just a suspicion.

The laptop functions are in need of a redesign. If the bag is laid out on its front then the protection is not enough, as it can be easily flipped and potentially damage the laptop – I think this will be a problem.

The pouch for a laptop and an iPad (since we all carry these now) needs an extra restraint if you have 2 devices. The pouch also needs to accommodate papers better.

My laptop bag is pretty bulky and I see others are mostly looking like the same. It needs a place for a label. Again, the material does not seem like it would survive a trip in the hold. I have used Incase products (covers for iPhones etc) so I was happy to see this came from them.

However, the thing they are known for – durability – was a bit of a disappointment.

THE TCRITIC TAKE: “Good first step with room for improvement”

Incase is expanding outside its usual space of providing cases for handheld devices and tablets. This whole series is basically a first generation product from the company. It is a good take and a good first effort but not quite good enough in my opinion.

They could have done a lot better.

One example of this is the weather proofing on one side of the case but not on the other main side and the external sides. It just seems that they assumed that the rain and weather only affects the side when the luggage is in motion. The case itself is not balanced automatically to leave the top side exposed.

The use of felt-like fabric cloth is a really bad idea, especially because Velcro loves this stuff and the amount of Velcro that is in baggage handling is quite amazing. With the external fabric being cloth, it will also absorb a lot of moisture and other liquid like stuff – such as spilled coffee.

Appearance-wise, it looks good. Wheels are great but they need to be wider apart. It should be more stable when walking fast. The case is too heavy and could really be much lighter for the intended carry-on purpose.

The emotional hook of appealing as a combi-type case is compelling, but only if that was the way it was marketed. The combined-value aspect isn’t featured as a value, so it doesn’t quite come across.

For females who have to dispose of one extra bag to comply with carry-on requirements, this is an issue. The design looks masculine so unlikely it will have feminine “curb appeal”. For males, it has a value of making a small bag for a trip without the need for an additional bag.

THE RATING: “Middle of the road”

SNAP POLL: 

[poll id="78"]

It’s a topic that deserves some analysis.

HotelTonight is, of course, the hotel booking app for smartphones and tablets created two years ago by a well-funded US startup. The app sells rooms at limited times (for same-day sales only, from noon daily) at dozens of destinations in North America and Europe.

HotelTonight limits the inventory it displays to a handful of hotels in any city at any time. The severely edited list of choices makes it less overwhelming for a user to choose a hotel on the go. The app has been downloaded three million times and has spawned a legion of copycats.

In light of the success of same-day booking for hotels, there are equally several possible explanations for why no startup has attempted to make an app that sells a tightly edited selection of last-minute plane tickets.

For example, Alex Bainbridge thought that one very simple reason was:

“Because young 20-something founders don’t sit around at midnight going: ‘Umm, if only I could fly to X, NOW’… But they do go to bars and find they need to stay overnight somewhere… for various reasons!”

“HotelTonight does a good job of generating incremental bookings (or so they say), rather than replacement bookings—or getting long-term customers.”

Eventually, as Tnooz’s intrepid air product historian (and resident old person), I agreed to take up the challenge and answer the question in detail.

Would mobile make a difference?

I think there ARE some opportunities in mobile for selling air product creatively, but a specific mobile model focusing on last-minute plane tickets will not work.

Some airlines have become quite good at selling in the mobile channel. For example, AirAsia, Jetstar and EasyJet are among the airlines that have managed to conduct effective last-minute sales via devices. But these are not truly 11th-hour, same-day, last-minute sales.

The offers are for departures still several days away.

Certain time periods work well for selling fares on short notice via mobile. But this is not offered on a consistent basis. Could a process work with this?

Actually in the 1990s, I worked with a company now part of Lastminute.com (owned by Sabre) which had a bid model.

You, the customer, placed your bid on a flight, and the auction was run around you with the price response coming back to you, IF you were in the catchment.

This was pretty much as Hotwire and Priceline did. The beauty of this was that the response came to the mobile.

Could it be time to do this again? Actually, I don’t think distressed airfare sales via mobile devices will be anything but a marginal business in the US, foer example.

My reasoning is simple: Americans are cash rich but time poor. Europeans are more open to spur-of-the-moment travel, and have more flexible employment time to make these sorts of decisions.

Perhaps, as some have suggested, creating a smaller universe of options for fares will lead to more sales because consumers will be less overwhelmed by choices on a mobile device’s more limited screen space.

I still cringe at the thought of a large GDS who once demonstrated its original mobile product to me which had a SCROLL function through ALL airports as a key feature of the product. That wasn’t user-friendly, to say the least.

So it seems that there could, theoretically, be a service that was to offer a severely edited choice of flights for arrival within 12 hours.

We have seen apps like Next Flight head in that direction, though it lets you see available flights without letting you book those flights either directly or by being sent off to another company’s booking engine.

Teasing consumers without offering them the chance to actually buy a product seems pretty silly.

It’s my premise that there are multiple reasons for the absence of an “AirTixTonite.com.” So before you rush out and purchase the domain name, which is still available at the time I’m writing this, here are some guidelines as to why I don’t think the concept will work:

1. There aren’t enough last-minute empty seats
2. It would be tough to do, from both technical and business development perspectives
3. There is likely to be only moderate value offered to the customer
4. If it became successful, the airlines would kill it
5. There is no trust by the consumer in a pricing model that offers a “discount”.
6. It has been tried before, with moderate success, but not recently

“Plenty of empty seats – What a waste”

It is an absolute truth that airline inventory is a perishable commodity. Once a plane takes off, an airline can no longer sell any seats that might remain empty.

Yet in the past decade or so, we have seen consolidation in the airline industry. The idea that airlines have planes flying around half empty is no longer true.

Since deregulation in the US commenced in 1979, more than 50 airline companies have gone bankrupt—some more than once! RIP are famous names such as Eastern, TWA, PanAm and National.

In fact, very few US airlines that launched post-deregulation survive.

More recently, other airlines have merged, such as United with Continental (2010), and Delta with Northwest (2008), and, over in Europe, British Airways with Iberia (2011) and Lufthansa with Swiss (2006).

Mergers tend to lead airlines to reduce services, combining formerly overlapping routes and hiking fares in the absence of competition.

Air capacity – the number of airline seats available for sale – has modestly declined in the US, according to Airbus.

During peak seasons, finding a spare seat is especially difficult. A case in point: in the US, between now and January 16, only between 10% and 14% of seats will be empty on average, according to the AAA.

Thus the amount of “spare capacity” is, practically speaking, very small. Tight capacity means that suppliers hold the power when it comes to setting pricing and availability. That equals little chance for innovation by intermediaries – aka startups selling apps.

Surely it’s easy?

Actually, no. Setting up supplier agreements is a complicated process filled with restrictions and regulations.

There are significant technical challenges in setting and managing pricing. Access to the inventory is also challenging, particularly for startups. Despite being officially deregulated, the airlines market is one of the most heavily monitored and controlled markets in modern business.

Getting bonded, licensed, insured, passing state and national laws—not easy.

Further, I would say that there is an expectation from US consumers about the BREADTH of offering.

This goes back to opaque price product offerings of Priceline and Hotwire, in which consumers know the name of the airline or exact itinerary information (such as if it’s a redeye flight) until they pay their money.

Neither company’s opaque product for airfare was a huge profit-generator because many people stopped using the sites once they realized what airlines and flight times they had been given.

In the US, attempts at true intermediary opaque air products from Hotwire and Priceline have largely been marginalized to a very small number of transactions.

Would there be a great deal?

Probably not. Prices for US domestic tickets have risen in recent years. The average price of a domestic ticket has risen from a low of $270 in 1996 to $384 now. (Though in inflation-adjusted dollars, the price hasn’t changed, which is one of the benefits of deregulation)

The chances of a deal being able to find it, source it, and distribute it, is not that great. For proof? Look no further than your favourite travel site. Run a search for a route, and look at the the calendar pricing grids for the current range of ticket pricing.

Then see if could you get a deal off these fares? Unlikely. Metering the supply to keep people’s interest alive becomes very hard. In other words, you would have to keep the consumer’s interest by offering product consistently.

Consumers get bored easily.

As a way of illustrating my point, look at frequent flyer points and miles. Over time these have been devalued. Yes, people still search even though they are getting lesser returns. Why? Duh – its free money in the bank.

Could some make great strides with such a service anyway?

Well, sadly, this is an obvious one. If a startup, like our hypothetical AirTixTonite defeated the odds to become successful, then the suppliers would either have no inventory left (because the app and its clones would be too good at selling the distressed inventory).

Or else the airlines would pull the inventory to start selling it more creatively on their own, eliminating the middleman.

Remember that an airline typically makes the highest yield sale on the last-minute traveler who is often doing anon-discretionary business trip and will pay through the nose for a ticket.

So, a real problem here.

Further it doesn’t do anything for the brand value if the proposition is that the offer is there but the delivery is not. (Just look at the complaint boards for a certain US airline who offers fares if you join its low price club!).

In my view, trust in airline ticket sales is so tenuous that three attempts at a sale and someone will move on and NEVER come back.

A lot of data demonstates that business travellers tend to have higher yield than leisure travellers. But do remember that the business ranks are declining percentage-wise.

What about one of the big boys? We marvel at the brand value of the 600-pound gorilla, Expedia, who can be late to market in apps and instantly get five star ratings and then dominate.

So, maybe…

Has anyone tried it?

There have been many attempts at providing a true last minute service for airlines. Just as there have been attempts at providing other forms of dynamic pricing models.

Once upon a time in Europe, last-minute sales was such a common concept that operators stationed booths at airports to sell last minute seats or packages actually to people who would show up with cash in hand and be prepared to travel. At Nuremberg Airport, for instance, families would turn up and literally shop for tickets from offers hand-written on white boards.

Let’s just say that is not as common as it once was, but agencies still sell tickets on-site at the airport. Go to any airport in Germany and you will find a few agencies in each location. For example at Frankfurt (the main airport in Germany) more than 20 agencies operate still.

L’Tur and others came from this work and transitioned to the online world easily. Of late, this has fallen out of favour.

But the time lag is usually the problem that kills it. Making the right pricing decisions requires work. Indeed, several attempts to sell distressed merchandise in airlines have not changed the mode of distribution.

Ultimately, as all of the above examples suggest, there is a trade off in trying to create a mobile app to sell distressed inventory at the last-minute, a lot of extra work and some potential results, versus the status quo (keeping existing models and their high-yield ticket sales to profitable business travelers).

So, if you were an airline, which path would you choose?

NB: Clock aircraft image via Shutterstock.

To the “Follow me on Twitter” and “Like me on Facebook” has been added “Download the App”.

But this is all starting to take serious amounts of time. On my personal iPad, which is a wifi-only device, I typically get two or three update requests a day, requiring me to spend probably about an hour a week downloading the latest versions.

It’s yet another thing that increases the flow of digital junk on my machines. And this is before we, as users, even start using such apps.

According to Neilsen, the average user spends around 40 mins a day with apps.

I have also looked at the amount of interaction I have with the apps that I have (now numbering more than 150) on my various devices. I see now that many are really not that useful at all after their initial one time, “it’s interesting” peruse look at.

So, what strikes me is that the amount of time spent with just dealing with apps is increasingly wasteful, inefficient and often very annoying.

Here are the things I am beginning to see as general obstacles to the success of applications and the culture surrounding apps.

• Clutter – too many residual apps sitting around being useless – let’s call them Zombie Apps.
• Useless apps to start with, developed for no real reason other than it sounded cool and someone in IT had some free time on their hands rather than supporting users.
• Abysmal search on the various App stores. Apple and Google are particularly bad but NO ONE IS GOOD in this area.
• Mostly poor quality of the apps themselves, such as bad coding and lousy UX etc etc. I would also put this down to lack of discipline in the approval process by Apple and Google.
• Time wasted in companies managing apps
• Gaming the user to downloading useless apps (just when you thought SEO/SEM was bad!).
• Bad support for apps – how to fix or answer questions. Indeed, how arrogant is it to say that an app which is another channel for customer interaction doesn’t have customer support?
• Apps that assume that data is always on. Couple this with high roaming charges.
• Poor interoperability of apps with standard functions like GPS etc. I am amazed at how many apps just, well, fail.
• Privacy. Loads of people big and small companies have been caught abusing personal data.

So here is a series of suggestions of what you should be thinking about before starting your app development.

• What is the real purpose of the app? Define it and refine the use cases. Is the app really necessary?
• Apps may be smaller applications but they are still applications. This means that you have to use development methodologies – and there are NO short cuts
• Know thy users.
• HTML 5 is now pretty standard and makes the use of the mobile web probably just as functional without having to download and maintain an App
• Don’t over complicate things.
• Consider client and server side functions. Not everything has to be done at the client side.
• How are you going to get user engagement and, if necessary, increase the frequency of use.

And let me leave you with this thought. Check out this infographic:

With nearly 1,300 new apps being made available every day and 35 million being downloaded, how do you cut through the clutter?

This is not just in the US, but also across the planet. This had the effect to reduce the supply side equation by removing one of the most competitive players.

In turn it caused United Airlines and Continental to merge, thus the big players in North America went from seven to five.

So, why mention this?

The blockbuster acquisition of Kayak by Priceline is yet another moment in the realignment of the distribution system.

But there may be people inside both the Department of Transportation and the Department of Justice in the US who are going back and looking at the market and realizing that there has been a reduction in competition, with a resulting higher set of prices across the system that cannot be blamed on fuel prices alone.

Some background: the pinnacle of the conventional travel market was arguably around 1995/96 when the number of US agencies peaked at 55,000. Today there are fewer than 14,000 retail outlets (ARC figures).

The shutting off by different airlines of peripheral third party channels – e.g. Delta’s cutting off AwardWallet and others, is also part of the same trend.

These factors point to real underlying shift. the market is now supply side, and no longer a demand side.

According to Airbus’s global market study, the US domestic capacity has fallen every year for the past four. This reduction in capacity is continuing with the latest winter 2012 schedule. Worse still for the consumer is Southwest’s decision not to add capacity, meaning there is no major disrupter on the supply willing to make the market more competitive.

The average ticket price is rising at a higher rate than the price of oil. And, indeed, when fuel is only one part of the equation and the shedding of jobs continues, you can see why some US carriers are now more profitable than they have ever been.

And now the airlines are slowly tightening the channels of distribution – the market power they have as a group has improved enormously.

So what about the consumer?

He or she can hardly tell if there is a specific channel – they just know it is complicated and get tired of looking. Please, just ask a consumer!

They doubt the results from websites because the results are seemingly all correct, but all different (so-called fare guarantees and the various caches that exist make for vastly different results at any one time).

The big issue here is that the consumer doesn’t really tell the difference from Expedia or Kayak, they both do effectively the same thing as each other. ie you can complete a travel transaction. or search for a lead for one – the consumer probably doesn’t care if the fulfilment is on an airline’s site or that of an intermediary.

This, therefore, is a good time to jump in to the media search game for priceline. I suspect, however, the timing is driven by a number of factors.

• The apparent “win” by American Airlines over Sabre (and an earlier termination of the action involving Travelport) is a significant blow to conventional distribution.
• That the conventional ota market has seen several players decline (Orbitz and Travelocity are not as relevant as they once were).
• Expedia’s stock has risen lately and it is currently trading near an all time high, which means that it could use its stock as a weapon to acquire other businesses.
• The emergence of strong local brands in travel challenges the concept of the monolithic mega brands
• The lack of opportunity for growth and the maturity of the current ota market provides little opportunity for the big four without significant expense.
• Anecdotal evidence points to a move away from CPC and a reduction in CPA values as the airlines gain more power.

Meanwhile, Priceline is already using American Airlines for direct connect and can now connect the other airlines using the Farelogix connection.

The acquisition solution also adds a foil for the airlines versus Google, all the while Kayak continues moving away from using ITA Software as the primary provider of its airfare shopping technology. The airlines have also effectively crippled Google Flight Search by not giving full access to their inventory, in particular Delta and Southwest.

The result is that the airlines are not making it easy for GFS as a product to gain a foothold in the market.

Final thoughts

While there might be a lot of high fives in Norwalk, Connecticut, the more sinister (and cynical view) has to be that the price paid here was too high (and don’t expect Hipmunk will be the next one to be snapped up).

But the battleground for the OTAs and the metasearch players on a category basis appears to favour search/metasearch over OTA. The latter (OTA) is arguably more expensive without returning corresponding and significantly higher revenue numbers.

Overall, I think this is a interesting move, albeit an expensive one, for Priceline. It’s a bit of a blow for Expedia, Google and the GDSs. But the real winners here, again are the airlines.

NB: Aircraft taxi image via Shutterstock.

Or, indeed, anyone providing any IT telephony services to hotels and to anyone who uses the web.

As a road warrior (I am on the road more than 180 days a year) I find that, generally, wifi service in hotels is poor, with larger hotels usually the worst performers.

The user experience is unpleasant and often doesn’t work.

Furthermore, the massive growth of video and mobile data devices appears to have changed everything.

A recent Gartner study on BYOD (Bring Your Own Devices) surveying CIOs indicates 38% of workforces will be using their own devices for accessing company data. I think that number may be low when the definition of “own” devices is reviewed more carefully.

Admittedly I have a high expectation that the system should just work, but generally it suffers from the following:

• Confused network set up – for example, different SSIDs. A large percentage of hotels are inconsistent in how they set up their networking and as a result roaming inside a property is challenging
• Inconsistent sign up/sign in configurations even within the same property
• Inadequate infrastructure – either too few accesses or not enough bandwidth, frequently both
• When free wifi is offered, it is very poor, with access at crippled speeds and in limited locations
• Too many blank spots, often in the rooms where its offered

Much of this can be attributed to poor planning of the network infrastructure within the property. But it’s not really their fault. Hotels tend to go for long term planning cycles of three to five years. Let’s face it, major refurbishments of properties occur pretty infrequently.

Hotels have been blind-sided by the massive growth of BYOD. Indeed, video and BYOD have turned the paradigm of access on its head. Bill Gates’s vision of “One Desktop” is now confined to the dustbin of history.

Consider these statistics from Evercore Partners:

• Mobile data volumes have grown 33-fold in the last five years, and are projected to grow 18-fold in the next five years.
• Ericsson forecasts that mobile subscriptions will reach 9 billion in 2017, of which 5 billion will be mobile broadband connections.
• Video traffic, which is now 50% of mobile traffic and will be 70% by 2016 and has surged due to the proliferation of time/device shifts in content viewing habits, forcing over 40% of traffic off traditional wireless networks to Wifi networks.
• Wifi is delivering almost twice as much mobile data to users as the AT&T and Verizon cellular networks combined.

Just look at these stats in the space of one year:

Evan Lewis, Accor’s vice president of communications Asia-Pacific, stated:

“It is clear that we must take a position on free Internet. By the end of the year, internet will be free in all Accor hotels across the Asia-Pacific region.”

That is some stake in the ground!

There are a raft of new mobile products and services being developed across the world. Many innovations are coming from some very smart startups, with literally billions of dollars being poured into the sector.

But solutions for true independent mobile “seamless” data roaming are coming, such as hardware solutions such as the FreedomPoP wifi mobile hotspot and the iPhone sleeve.

Software hotspots that are built on meshed, homogeneous and heterogeneous networking such as solutions from companies such as Connectify will address the complexity of hotspot access and bandwidth.

So how should hotels be thinking about this problem?

• Better manage your infrastructure
• Get out of those old Wifi contracts and read them
• Don’t rely on the old telephone company to be your provider
• Have a very clear policy with regard to the use of mobile data
• Even if you cannot provide the bandwidth, make sure that what you can provide is clear and understandable

What can users do?

Make your requirements known. Be clear if the hotel’s service doesn’t meet your needs. Log it on TripAdvisor or other review sites. Let the property know if you have problems.

Oh, and please don’t use Netflix or other media streaming services on the road – its bandwidth requirements screw up surfing for the rest of us!

NB: Hotel wifi bed image via Shutterstock.

However, events in the distribution marketplace have now overtaken this evaluation. So will the Commission react or will it take a continuing passive role in regulation currently run through its Code of Conduct?

When the European Commission announced a review of the Code of Conduct in 2007, it had a number of options open to it as part of that review.

• Option 0: status quo
• Option 1: partial deregulation
• Option 2: full deregulation (abolition of the Code of Conduct).

After due consideration the commission essentially let the current rules stand, extending status quo. These became the 2009 regulations (formally: Regulation (EC) No 80/2009).

By 2010 however, the commission faced several new factors in the marketplace – particularly the potential entry of Google (through its purchase of ITA Software).

It hired UK firm Steer Davies Gleave to conduct a mid-term evaluation of “Regulation 80/2009 on a code of conduct for computerised reservation systems and repealing Council Regulation 2299/89″.

Whilst the draft report was published to the stakeholders (disclosure: the writer is one of these) in January 2012, it was not released to the public and has been held internally since then. It is now proposed that the report will be issued in the autumn of 2012.

New landscape

Of course, during this time, the GDS marketplace in the US has come under much scrutiny as a direct result of the Department of Justice investigation of Sabre, of the lawsuits surrounding American Airlines (vs Travelport, Sabre and Orbitz), and of the US Airways vs Sabre lawsuit.

In addition, IATA has started a much publicized push to bring openness to the distribution environment, which has affected most airlines, IT providers and distributors.

The recent rulings of the US District Court of North Texas in allowing the re-filed complaints of American, the dismissal of the counter claims and the laying out the rules for the case, have reverberated around regulatory and legal circles on at least two continents.

It should be remembered that the US GDS market has been largely deregulated, yet oversight remains with both the Department of Transportation and the Department of Justice holding some sway in the matters arising from the GDS marketplace.

For Europe, where Amadeus holds significant market share, the rules regarding dominance (effectively any marketplace where a single player has more than 40% counts as having a dominant player) are clearer.

For the twin marketplaces of airline intermediary distribution and airline IT services, Amadeus clearly meets the dominance criteria.

In recent years Amadeus has de-emphasized its other businesses by selling off its interest in OTA Opodo to concentrate on airline distribution and IT services.

The European Commission for Mobility and Transport (under Siim Kallas) has in the past been the formal regulator in these matters.

However, as the size of the players reaches dominant status, jurisdiction now also has to be shared with the EC Competition Commission. In the past only potential mergers have been referred to the Competition Commission. Indeed, Amadeus is listed in seven such cases.

Clearly the EC will need to broaden its scope to look at the impact of the US regulatory investigation and federal and state civil anti-trust lawsuits.

While the Commission has in the past not followed the same lines as the USA, the impact of a controlled marketplace is something they abhor and thus it is highly likely that the whole Commission will be looking hard at the impact of these cases.

Stay tuned, folks. This is a war of which only the first battles have been fought.

NB: European flags image via Shutterstock.

The new slogan is “Find Yours”.

At the centre of the campaign is the use of consumer generated content – perhaps a throw back to the good old days of travel advertising and marketing where people tried to encourage more travel rather than just trying to steal it from competitors.

The web is well and truly saturated with travel offers but surprisingly limited capacity – as such the market has turned in some sectors (like airlines) from a demand side to a supply side-scarce commodity market. In that situation what’s a marketeer to do?

Expedia is to be commended for taking the moral high ground and trying to rise above it with its new campaign. However, as I was hearing about the new campaign, I felt I had heard this story before.

They say that there is nothing new in advertising (and I used to be an ad man a long time ago!) and, well, the new campaign was just a bit too familiar.

Rummaging around, I found something very similar from a different OTA.

Eureka! The Expedia campaign is remarkably like a campaign run by India-based OTA Cleartrip last year.

Expedia hired 180LA, an award winning creative agency in Los Angeles, California, which came up with this:

At the centre of this campaign is the UGC. But check out the YouTube Channel for ClearTrip and you will see what I mean – this has been done before and quite effectively.

Cleartrip went with the concept of “Every trip has a purpose”, tied into its core principle of making travel simple.

If you would like to see the making of the videos you can go check out its blog on the subject from January 2011.

Do you think that the two sets of messaging appear to be pretty similar?

I asked Cleartrip’s Hrush Bhatt about it:

“Ever since we launched, we’ve been used to being imitated.

“Although, I must say that until now, most of our imitators have been local companies. And since imitation is the sincerest form of flattery, I must say we’re flattered to now be imitated on the global stage.”

[It's not the first time ClearTrip has found itself on the receiving end of imitators - check out this snippet].

Nevertheless, more power to both companies (particularly since they cooperate in the domestic India market as Cleartrip has been powering Expedia’s India domestic air product for several years).

But it seems Expedia might be learning about other things than air distribution from its Indian friends.

However it suffers at the hands of the incumbent players who tend to be somewhat stodgy in their approach to promoting innovation.

The key stakeholders here are arguably the GDSs, but they find themselves under attack from a number of places.

The airlines in the form of IATA are starting an initiative to create more standards in airline distribution. The share of GDS segments continues to decline and developers are frustrated with the level of access to data, which is far below that of other industries.

But, now, enter SITA (arguably the glue that links the airline community, so there is no denying its importance and role in the industry)and the Developer.Aero website.

The company’s chief technology officer, Jim Peters, is infectious in his unabashed enthusiasm for opening up the world of airlines based technology. And the timing is right.

BYOD (Bring Your Own Device) is sweeping through all sectors of the commercial world and the formerly closed ecosystem of travel is no exception.

Already we have app stores from many players, including the GDSs with both Sabre and Travelport starting their own.

As the various THack events have demonstrated, there are many parties willing to open their APIs to the independent developer and startup community.

This eager world of developers is hungry to build solutions that meet the need – both perceived and actual – of the traveling public. The day of the omnibus solution is over.

Standards, however, are essential to this process. OpenTravel has been developing its OpenTravel 2.0 next-generation set that not only updates the data elements but streamlines and transforms the processes and interconnectivity of the users.

Hoping to sweep away the legacy of heavy overhead infrastructure that first generation XML standards brought with them from ALC and EDIFACT, these new messages are lighter and more efficient.

Change however does not come without cost nor is it painless. The embedded base of messages and standards will take time to evolve.

But the time for placid evolution is no longer here. High speed change and perhaps an innovation revolution in travel technology is happening now with and without the traditional players.

There are many willing parties who are eager to become participants and they are finding will investors. Anyone who wishes to remain any kind of gatekeeper in this work will, as in so many other industry sectors, find themselves swept away.

The wealth of available talent and tools to aid the developer of travel technology solutions is growing daily.

Those of us who have been in this world for a long time must embrace this change and help drive the necessary advances in both technology and commercial models.

NB: Developers image via Shutterstock.

First of all, the pronouncements on high from IATA about so-called new distribution paradigms were fast and furious over the past few weeks.

But now that Tony Tyler, IATA’s Director General and CEO, has declared that he and the GDSs are “absolutely not” luvvies, in response to a question during the SITA Airline IT Summit recently held in Brussels, what does that actually mean?

Perhaps it would be good to examine possible results IF (and I stress if) the airlines were able to impose a (impossible?) new world order in distribution.

First let’s consider a few facts. GDS share is dropping and this rate appears to be consistent if not accelerating. IATA quotes GDS distribution down to 60% of sales.

In the US this number has fallen to around 40% (as quoted during the recent American Airlines vs Travelport and Sabre lawsuits).

Using a variety of different analysis elements, my own team estimates that worldwide GDS distribution is about 42%. The discrepancy between IATA’s numbers and mine can be explained by the number of LCC non-GDS and direct distribution by the airlines themselves.

Furthermore the growth of the GDS bypass bookings is accelerating, albeit from a low base. Recently the non-GDS owning Passenger Service System (PSS) companies have taken a few mis-steps.

Despite the gain of United to HP’s Shares platform, the withdrawal by American from the HP contract and the recent losses by Navitaire (JetBlue, WestJet, Volaris and Virgin Blue), mostly to Sabre, has made the credible alternative to a pure PSS less so.

So what would happen? The GDSs who own PSSs are not going to wait.

There have been some interesting developments that would indicate that the highly restrictive agreements that prevent the airlines from freely distributing their products via third party channels are now spreading to the PSS side of the house, so there is a strong possibility that new PSS contracts will contain restraints on the airlines as to whom they can connect and how they can connect.

Amadeus opened its non-GDS network to third party distribution via Farelogix, for example. However the form of that link is not without cost or constraint. This is not just a technical constraint – although it might be painted as such – but more of a commercial restraint.

Recent Amadeus numbers show that the company is now making more profit (per unit) from the PSS side of the business than from the GDS side of the business. Thus a migration away from the GDS model would be less of a problem for Amadeus than Sabre.

Of course, Travelport could be impacted as it has only a limited footprint in PSS now that United has migrated its functions to HP.

And what of the regulatory positions on this? In the US there is a Department of Justice investigation of the GDS contracts, but it has so far not gone into the PSS contracts.

In Europe, despite being acknowledged by the current European Commission’s review of the GDS Code of Conduct, there is no control over the PSS contracts and this is currently specifically excluded from the regulatory environment.

The conclusion one could form is that the GDSs just move the goalposts from one area to another. Worse for the airlines, there is no regulation and the contracts for PSS services are typically at least five years, often ten.

I wonder if the airlines have fully thought through these issues and if anyone else is concerned about the potential restriction on choice or flexibiliy that can arise from a restrictive PSS agreement.

NB: Goal post image via Shutterstock.

Well, airline best fare guarantees, which pledge to provide the lowest fare online or to reimburse you the difference, only occasionally measure up.

I am going to pick on Delta Air Lines, where I am a Diamond Medallion Member, but the point applies to just about every other airline, too.

Delta has its Best Fare Guarantee, which is designed to give you confidence that you can shop on Delta.com and get the lowest fare.

However the Best Fare Guarantee has several restrictions that Delta can potentially hide behind. And, the technology behind Delta.com provides you with limited answers and sometimes poor-flight selections. 

Milan to Seattle

Here’s just one example to illustrate the point about Delta.com not always being the go-to-resource for low fares.

I ran Milan to Seattle fare searches, departing June 12 and returning June 21, on Orbitz.com, powered by ITA Software, and Delta.com, which uses a combination of technologies. I verified that I would get consistent answers by using different browsers and machines.

The two sites came up with very different results.

The fares and flight durations on Orbitz.com were lower and shorter, respectively, than on Delta.com. And, Orbitz offered more choice — 206 results vs 17 on Delta.com.

Delta.com ordered the results by lowest price from Euro 1034.50 ($1,322.38) to Euro 1589.85 ($2,032.28). And, flight times for outbound flights ranged from 18 hours and 30 mins to 37 hours and 8 minutes. (Yes, that means you would overnight at least once despite flying westbound.) And, Delta.com returned only 17 results.

The flight results on Orbitz.com were clearly superior. Orbitz’s first page alone showed 25 results, with fares ranging from $1030 to $1074, and with flight times ranging from 13 hours and 55 minutes to 16 hours and 55 minutes.

Thus, the Orbitz results showed lower fares and flight times of shorter duration.

Delta.com has made it very unlikely that you would have found the lowest Milan to Seattle fare and Delta doesn’t provide the most practical itineraries.

At other times, Delta.com is too focused on a particular control showing ONLY the lowest price, where no lower published fares are possible, up to the first 25 results. This is fine for domestic fares, but lousy for international fares.

With its focus on lowest fares, Delta neglects logical fares and itineraries. For example, if there is merely a $1 difference between a nonstop and a one-stop, Delta chooses the one-stop with the lower fare.

Orbitz uses a different set of algorithms based on ITA’s engine. It approaches the problem differently. As a result, in many cases Orbitz finds better results, particularly for international searches, as the Milan to Seattle example shows.

Delta is biting the bullet and is considering moving to ITA (or at least it apparently was until this “glitch” drew widespread media attention). Reports say Delta frequent flyers were retrieving sometimes-higher fares than other travelers based on the airline trying out a new provider and using Delta’s current provider, as well.

Although there is speculation that the new provider was ITA, a Delta spokesman declined to name the third party technology being tested.

These issues and the Milan to Seattle example point to the conundrum that you think you found the lowest fare, then consider that flight results can be very inconsistent.

The issues with Delta.com or other airline websites also raise the question: Do airlines try to provide their lowest fares all the time?

The jury is out on that subject, but  I don’t think airlines try hard enough to provide the cheapest fares to all of their users.

But I also don’t I think the airlines deliberately push higher fares at their better customers, as this recent article — which is unsubstantiated, in my opinion, suggests.

And, do travel agents always push the lowest possible fares to their customers? The obvious answer is no.

A travel agent will recommend fares that are not the absolute lowest because business travelers often change their itineraries, and thus the reduction of risk and the possibilities of changes become more important than the absolute lowest fares.  

In turn, this contributes to the fact that agencies generally charge higher fares than online sites.  Thus, average fares on online sites are much lower than via an offline travel agent — not because agents are bad or lazy — but because they are providing a service and not basing everything on only one metric — price.

So now do you think you usually find the cheapest fares?

Hardly! That’s because airlines deliberately make it difficult for you to find the best airfare.

I hope your brain hurts from reading this — and I deliberately simplified it.

Sadly, inconsistent results from intermediaries and airlines drive so much unproductive searching.

Perhaps the key question is: Does anyone want to change this?

—–

Note: Photo courtesy of Shutterstock

The leader in some respects these days is Skyscanner, which has worked really hard at developing a local delivery capability. For example, it is number one in many markets such as Russia.

The US leader, Kayak, has not managed to replicate its fortress-like position in America, but does a respectable job in traffic despite often seeming to struggle with content (like most players in metasearch-land).

Meanwhile the leading player in Asia, Wego, has gone through a metamorphosis of late. I managed to catch up with its ex-CEO, now non-executive chairman Martin Symes in Dubai during Arabian Travel Market.

“Larry Page”-like Ross Veitch has now re-assumed the top slot. With a new investor on board (Tiger) and a new office in Jakarta opening, the company seems to be going through a growth phase but with a twist. It is taking its brand of local metasearch out for a global spin.

What’s so special about the “new Wego”? It has taken a page out of the Skyscanner playbook and is targeting new country markets by offering local content in a new setting.

With many new languages now on offer, Wego is bringing the fight back to the Scottish contingent. Coincidently, Skyscanner put down a footprint in Singapore at the end of 2011.

Wego is putting in some significant work in the areas of social media and mobile. While its existing development team will stay in Singapore, Wego will move its social and mobile development to its new address in Jakarta in the very near future.

The Indonesian market is experiencing one of the most dramatic turnarounds of any on the map, so Wego is wise to focus on it. Its growth is massive, and it is not without coincidence that the largest order for jet aircraft ever made was placed by an Indonesian airline, Lion Air.

So what’s next for Wego? With Martin Symes now based back in the UK, we can probably expect them to seriously look at EMEA and shed its Asia-Pacific moniker.

With the new Arabic version announced this week at ATM, it has stolen a march on just about everyone. Expect a push in other key markets where they will be able to dominate.

If Kayak thinks its on/off again IPO will give it an edge in the international market, there are at least two strong spirited competitors who are not going to give any quarter in the world’s local markets.

I suspect that investors will be checking the fine print of any prospectus from Kayak to see where international fits.

With the likelihood of an easy global expansion from Kayak receding, the challenge for others in the search space (including Google) is to take on the leading players in the different geographies. Wego and Skyscanner make it look easy. It certainly isn’t.

Local is the new black.

Yet, (and strangely conversely) some of the highest value companies to have emerged on the web in recent years are playing in the travel space and yes, you guessed it, they come from a technology base.

As I left Miami from the OpenTravel Advisory Forum I was struck by an ad for HSBC that stated: “two thirds of the world’s billionaires started with nothing”. Hmmm, food for thought.

So why is it the traditional players find it so hard to make investment decisions in travel technology? As noted in my post yesterday – traditional travel technology looks like a third world (read backward) country. Everyone involved seems to be petrified of upsetting the status quo.

Today’s great ideas and initiatives become yesterday’s door stops just too darn fast. How to break this cycle of disheartening inertia should be a priority for all of us involved in travel technology.

As I looked around the room at the OpenTravel session in Miami this week, I was struck by the age of the participants. So many people there are just plain old. Nothing wrong with old but it needs balance and it needs young blood.

I was also disheartened by the lack of people who had been pioneers in early stages of the web. There are a lot of people who have been successful in travel technology but they don’t seem to be participating in the next generation.

So here is an appeal. Those of you who made a killing in technology and want to participate in developing the next generation of travel, get off your rears and come and participate in this business.

Help us to shake the inertia and get real world products into the marketplace FAST.  Help us to blast through the traditional long lead times for change.

For the longest time the adage the quick and the dead didn’t apply to travel. Well guess what … now it does. And I for one do not intend being in the dead category. Care to join me?

NB: Cogs image via Shutterstock 

This comes on the heels of an IBM report, released earlier this month, that looked at travel in 2020. One of the interesting conclusions focused on consumer dissatisfaction with how they are handled by online travel agencies.

Let’s face it, the consumer is tired. He (perhaps it’s more likely to be she) is tired of the lack of innovation and bored with the ways the consumer is gamed by the system to deliver less than valid responses.

Sadly little has been done about it and any efforts have been few and far between.

However, there is some encouraging news coming from OpenTravel members Avis Budget and Amtrak. Avis Budget has actually invested a fair amount of money in semantic web activity and has donated this work to OpenTravel.

But, what does this mean for the travel industry in general?

I believe there is a desire for a move away from the conventional four-element search widget. The widget forces users down a funnel that does very little to help the customer reach his goal of relevant results. What every consumer thinks is “Why the heck do I have to do all the hard work?”

And, they are right. Surely in this day and age the consumer shouldn’t have to work hard. How many people in mature web markets are actually going online for the first time?

Semantic web or web 3.0 essentially moves forward from the access to basic data on scarce resources, which was very much the first generation of the web, through to the social side of the web and now to the context, that is, where the results the user gets are more relevant, with less information of no value.

There is a belief by many that if a human answers a question then the human will likely make a mistake sooner or later, machines, however, should not make mistakes.

In the case of travel, ‘mistakes’ are largely data that is not relevant, served up to the consumer who then has to sift through to find any nugget of information.

In simple terms, look at any travel website and see if it actually enables you to enter the information in a precise enough form that will fully address your questions. Nope, not going to happen. Consumers cannot express themselves clearly within the confines of the current generation of travel sites.

What people relate to is that they can match certain elements in a generic query and then adjust the query to better match the possible right answers.

What travel implementations of semantic web will do is place both the query and the results into context making the experience better, faster and more germane to the respective users.

However, before we all get too excited, along the way there are many challenges. Not least is the creation of the ontology ecosystem necessary to have the data objects have the right meanings.

As I listen to the discussions at OpenTravel’s session, these are almost mind numbing in their complexity and tedium of detail but someone has to do it.

Travel needs people to define the standards of the different data types and meanings in all their forms and interactions. Thank goodness for open standards groups who can make some sense of it.

So get involved because if you don’t then the whole industry suffers.

One of the speakers – a distinguished professor from Rensselaer even went so far as to describe the travel industry as “third world”. That description is accurate in my opinion and needs to addressed.

Travel itself needs to get over itself and its overinflated view – only then can the customer get what he wants.

If not, then travel will get labelled as a sick country – but we don’t have the European Commission to bail us out.

NB: Image via Shutterstock

Today, travel agents,  the human kind,  are either corporate agents or the entrepreneurial types who are scraping as fast as they can to make a buck, euro or quid.

Frankly, in the ever urgent world of needing to make money from the shrinking pie, they have to be increasingly efficient and don’t do things unless it contributes to the bottom line.

Agents are also very dependent on their GDSs, acknowledge the frailty of the system but, in the case of European agents at least, the extent of the content is barely adequate to provide ubiquitous service.

However, the increasing complexity in travel without the corresponding increases in net revenue makes for a hard life – things aren’t as much fun any more and perhaps agents have an inbuilt resistance to change.

At a recent Web In Travel conference in Singapore, Gerry Samuels of Mobile Travel Technologies, told a story of how when he was asked to develop an agent mobile solution, he developed a couple of options but agents chose the familiar green screen lookalike.

And how does the consumer perceive the agent?

To gauge this, I typed “why travel agents suck” into Google and turned up a pretty significant cache of results but put it in quotes and the results drop to nine.

Contrast this with the search term “why travel agents still exist” and you get 1970 results  - good news or false hope?

Part of the problem is they are choosing something familiar and don’t know what will work in future.

They tend to be mired in process and the here and now, not that future state that mobile is representative of.

And, as the Boomers leave the market, older agents are retiring and dying off, imagine the new workforce coming in who won’t know how to work with green screens (or even blue ones for that matter!).

Like many businesses which struggle with the evolution of technology, the travel industry has tried very hard to make mobile a cornerstone of the next generation platforms.

But. are these solutions just pursuing technology for its own sake?

Perhaps a critical question is how are we making it interesting for young people – the internet generation – to work for the industry? Can we entice them in? Or are there just too many older generations trying to migrate their business instead of allowing creation of new business?

Sadly, the position I would argue is that intermediaries didn’t realise the importance of mobile and delegated responsibility (as they have for many years) to the suppliers and now find themselves out of the loop.

Indeed by ignoring mobile agents were bypassed by the suppliers and providers who found they could go direct to the consumer and that an agent in the loop didn’t make a whole lot of sense.

There is no shortage of applications for users of travel in the mobile space, but what about the number of b2b applications for the intermediary community? Very few are operating today.

Mobile in travel has a broader meaning than just fully functioning “agent in a box” services.

Most will agree that the better apps tend to do one thing really well and travel with all its complexity is not easy to do well.

And perhaps that is the crux of this story – agents left high and dry by mobile are a victim of the evolution of travel.

NB: Image via Shutterstock

To explain this, I have created an infographic to demonstrate why air results are displayed in such seemingly different ways. The pyramid is not built to scale, but shows the hierarchical level of issues for air results.

The top two tiers are what can be accommodated via online outlets, including OTAs, airlines and metasearch sites. The next four tiers are all possible results that travel agents and airlines can work on and see.

The bottom one… well that’s just plain bad. So now you know.

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