The global distribution system model of selling air fares is “evolving but not broken”, according to Amadeus UK managing director Tim Russell.
Speaking at Business Travel Market in London yesterday, Russell made a vigorous defence of the GDSs, saying: “I keep hearing about cost, but no one denies our value.”
He said: “Amadeus handles about 10,000 queries a second, similar to Google. We buffer the airlines from that. We process 240 transactions to generate a single airline booking, and the number is forecast to rise to 500. The airlines see about 30 of these.
“We take cost out of booking travel. We create efficiency, and charge a fair price for that efficiency. All Direct Connect [to carriers’ own systems] will do is stuff cost into another part of the business.”
Russell said: “Airlines have found a way to reach the consumer direct in their home markets, but we provide value in more than 200 countries. We recognise that point-to-point sales are easy, so we have a different price model for selling British Airways or easyJet in their home markets to sales in Columbia or Uzbekistan. That is where we bring value.”
He added: “I don’t believe this is a technology issue. It is a commercial issue, and there are commercial answers to commercial issues. The big challenge for the airlines is how they sell ancillary services on interline bookings [involving more than one airline], when 20% of bookings we handle are interline.”
EasyJet commercial director Paul Simmons agreed GDSs are vital, after the low-cost carrier changed its model three years ago to include GDS distribution.
Simmons said: “We recognise there are clients we cannot reach without being on a GDS. We are trying to get more sales through GDSs. The channel can deliver higher revenues for some sections of the market.” But he added: “It has to be cost effective. Cost will come out.”