Op Ed: AmTrav CEO Jeff Klee On The (Possible) End Of Airline Distribution As We Know It

Airline distribution has been evolving, at times quickly or slowly, for decades. The potential for change has always been great. How does it look when seemingly everything is changing? AmTrav CEO Jeff Klee delivers his take.


For all the talk about using the pandemic to rethink everything, it’s looking more and more like the new normal for business travel will be a lot like the old normal, just with more hand sanitizer everywhere. Sure, for a while there will be new things to worry about, like digital passports and national travel restrictions, but the major upheaval, mass consolidation and structural transformation that many predicted for our industry haven’t happened. 

Still, I wouldn’t count out big disruption just yet. It’s true that the corporate travel world hasn’t been the most fertile ground for change and innovation. Prior to the pandemic, we had 10-plus boom years. Thriving suppliers across the value chain had little incentive to rock the boat. Then Covid came and, suddenly, surviving today became more important than being better tomorrow. The impetus for change remained missing. But I suspect that over the last year, a lot of suppliers, albeit with more wonder than wallet, kicked around some pretty radical, transformational ideas. Some may yet see the light of day.

In air distribution, bold action is long overdue. Familiar objectives like merging PNRs and tickets, ditching booking codes and filed fares or simplifying fare structures with one-way pricing may ultimately gain traction, but a bigger, more intriguing disruption might also be afoot.

What if one or more major carrier says, “To hell with it,” and abandons third-party distribution altogether? With more and more talk of corporate direct booking options, and with leisure travel representing a bigger share of the pie for the foreseeable future, is it conceivable that large airlines might question if indirect channels are still worth it?

Extra operational layers like settlement banks, neutral ticket stock, GDS connections and travel agency support are costly. Functionally, third-party distribution constantly struggles to catch up to the airline dot-com sites, which are powered by largely separate merchandising platforms that airlines invested in heavily. Are parallel distribution platforms really necessary? Would it make more sense to just expose the same APIs that power the dot-com sites to some OTAs, online booking tools and large customers, and stop maintaining this huge infrastructure for the long tail?

AmTrav CEO Jeff Klee

AmTrav CEO Jeff Klee

Air ticketing has for years played an outsized role in the TMC business, a dependency which continues to impact companies and their travelers. TMCs’ original reason for being was to print and deliver airline tickets. As those tickets became virtual, TMCs invented new ways to be relevant — legitimate, important ways. But they still haven’t been able to shake their ticketing-agent roots. At most TMCs, the technology stack, the business model and the employee teams are all optimized for booking and servicing airline tickets, even though that is arguably the weakest part of their value proposition.

I’m not bold enough to call for an outright move in this direction, but it’s fascinating to think about. If airlines decide to end traditional third-party distribution, would that be a good thing or a bad thing for companies and travelers? What would become of those TMCs?

Clearly, economics would shift. With presumably less supplier subsidies for service providers, companies would likely be forced to pay more for travel management or take up more of the work in-house. The all-in-one providers might continue to have a place, although the barrier for new entrants would grow as scale and development team prowess became even more critical. 

For more traditional TMCs that serve the majority of large enterprises, the change would be profound. The end of traditional booking workflows would force them and their clients to re-examine the mechanics of managing a travel program. What sounds scary might actually end up being liberating. The assumption that there is only one way to procure airline tickets for business travel, largely unchallenged, would be blown to bits. In this new world, there would be lots of ways to book, but whether a traveler uses a supplier site, OBT or agent, the end result would still be a “direct” booking. Someone would prove quickly that the notion one needs a GDS and IATA number to assist travelers has always been flat out wrong.

Without the need for TMCs to build their entire tech stacks around air ticketing, a Great Unbundling could ensue. It would free up providers to focus resources on their core competencies and companies to procure only the services they really want. Omni-channel would go from industry hype to industry norm. Once the GDS stops being the hub for a TMC’s workflow and data management, services like booking, support, consulting, sourcing, reporting and duty of care could all be offered à la carte, without interdependencies. And without interactive PNRs to worry about, the remaining travel data elements are easily shareable across providers. Travel buyers could mix and match vendors to get the best-in-class of everything. In the amount of time it takes an industry veteran to say, “This can’t be done,” dozens of new innovators would pop up to help pass data and tie it all together. The necessity that mothers invention, absent for so long, would finally emerge. Among other things, we’d see new ways for TMC-negotiated rates to appear in other channels and for those channels to push bookings onward to providers that do reporting and tracking.

Strange as it sounds, if you blow up the way TMCs operate and the pieces come falling down, they might be reassembled in ways that are better for companies, travelers and, ultimately, even the TMCs. The idea that the vendor that provides strategic consulting and supplier sourcing must also be the vendor that provides traveler support always seemed illogical — they’re entirely different functions. And getting online booking services from an expense management company but offline booking services from a TMC never made much sense, either. Forcing the industry to rethink long-held but rarely questioned norms might be in everyone’s best interest.

After a brutal pandemic, recovery is finally in sight but there are likely more shoes still to drop. What if the light at the end of the tunnel we all see is really that proverbial train coming straight at us? The good news is, for most corporate travel stakeholders, the path we’ve taken so far has been rewarding, but imperfect. So if we soon have to veer right or left, it won’t be the end of the world.


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Jeff Klee

Author: Jeff Klee

AmTrav CEO Jeff Klee is a self-described computer geek who developed and sold his first video game at the age of 13. In college, he and a buddy got a crash course in the intricacies of the airline business while planning their own backpacking trip and later decided to use that know-how to help others save money on airfares. What was first known as 1-800-Cheap-Air was founded out of a University of Michigan dorm room in 1989. When the company took off, Jeff ditched his law school plans for a far more exciting journey, combining two passions — travel and software development. CheapAir.com was born, and soon after AmTrav for Business, which together serve almost 400,000 travelers annually. Jeff grew up in Los Angeles. He still lives there with his wife, two young kids, and golden retriever, none of whom, when the Dodgers are losing, want to be anywhere near him. Connect with Jeff on LinkedIn.
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