Perspective – December 2012/January 2013

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Ian McMahon

A travel ombudsman?

DIRECT from the travelBulletin department of unsolicited suggestions, comes the following aimed at AFTA’s new Travel Industry Transition Plan Working Group.

I note that there is some concern among some agents that the disappearance of the TCF may erode the confidence of the general public in dealing with travel agents.

I note that Australia’s Ministers of Consumer Affairs have written into the TITP a one-off grant to be used for consumer advocacy.

I note that other industries with robust self-regulatory structures shore up public confidence by appointing a credible industry ombudsman (who may well be a woman).

So what about a travel ombudsman?

Heard it all before?

Heard it all before?

THERE will be those in the travel agent and GDS commun-ity gnashing their teeth over the IATA-commissioned predictions of the brave new world that will emerge as airlines pursue their ambitions to morph into retailers.

That post-NDC vision of radical distribution changes over the next five years is reported in our story in Issues & Trends.

It anticipates airline websites grabbing 59 per cent of bookings rather than the current 34 per cent; it predicts the phasing out of GDSs in favour of “value creation hubs”; and it envisages that airlines will set up “buffers” between themselves and agents rather than facilitate direct connect.

Far be it from me to downplay the concern (not to mention apoplexy) that may be generated by this apocalyptic view of the future. But may I counsel the taking of a deep breath? May I point out that this is by no means the first time that airlines have entertained ideas of taking control of ticket distribution?

Remember, it was the airlines themselves who gave birth to the GDSs which, we are now assured by IATA-commissioned research, frustrate airline executives in quest of lower distribution costs.

Those of you who have reached my advanced years will recall that the carriers eventually chose to hive off their GDS divisions. Not least because the cash generated was often needed by ailing airline operations.

Now it seems the airlines want to see them disappear!

And in the past the airlines have engaged in all manner of distribution hegemony, taking over – or buying significant stakes in – travel retailers, wholesalers and consolidators.

When they were not acquiring existing distributors, they were running their own ticket office networks and setting up in-house wholesaling operations.

There is not much left of all that today – airline ticket offices are practically non-existent (albeit their demise was hastened by the internet), in-house wholesaling is on a small scale at best, airlines own few distribution operations.

The last vestiges of Qantas’ distribution assets – Qantas Holidays, QBT and Quickbeds – have been rolled into JTG and is there anyone who doesn’t believe the airline will be shot of its JTG stake just as soon as the share price is at a decent level. This does not mean that the latest generation of airline whiz kids, intent on reducing third party distribution to a small rump, will be as unsuccessful as their predecessors. But just saying …