American Airlines’ new long-term global distribution agreement with Amadeus means the carrier now has XML connectivity with two GDSs, enabling subscribers of each to sell American’s full range of fares, plus a la carte products such as Preferred Seats and Main Cabin Extra.
The development of enhanced XML connectivity outlined in the new agreement will also support real-time personalized offers, a major goal of airlines.
Cory Garner, American’s managing director of sales operations and distribution, could not give a date for when all those products would be on agents’ desktops, but he said that both American and Amadeus are interested in “getting this done as quickly as possible.”
When it announced the agreement last week, Amadeus said it would work with American on implementation and timelines. Once those plans are finalized, Amadeus said it will give subscribers information about the availability of American’s Main Cabin Extra premium seating product and other preferred seating types.
Garner would not comment on compensation — airlines have long paid airlines transaction fees for bookings — but did say that from a high level, he saw no “material changes” in the commercial model.
Garner said the agreement with Amadeus was very similar to American’s agreement with Travelport, which was announced in March.
Garner has compared the ancillary content that this agreement enables to HDTV. He compared the XML pipe — in this instance, one built by Farelogix and Google’s ITA Software — to the fiber optic cables that deliver HD content to set-top boxes and TV screens.
That pipe is compliant with IATA’s New Distribution Capability (NDC), a proposed XML standard outlined in IATA’s Resolution 787, now before the Transportation Department.
Garner said American was not jumping the gun by adopting this standard because the airline’s own direct connect standards, in production since 2008, predate NDC.
“It just so happens that the API that we use has substantively been adopted by Open Axis and later by IATA as the New Distribution Capability standard,” Garner said. American, he said, is simply using the same technology it has always used.
Amadeus said it has been using XML to connect to airlines’ host systems since 2009 and to connect to travel agents for much longer. It is already using XML code to link with several low-cost carriers to access their availability and pricing data as well as to manage their ancillary services, according to an Amadeus official.
Ancillary services are high-margin services, particularly when compared with the narrow margins that typify the airline industry overall.
Garner and other airline executives have said they do compensate travel agencies for high-yield tickets, but these compensation agreements can vary from airline to airline and from agency to agency. Garner said that compensating agencies for high-yield sales has been a practice in the business for a “very long time.”
But, he said, ancillaries are a “whole new revenue pie” for airlines to think about. He said that any time agencies can generate incremental revenue for airlines, “there is an opportunity to share that value.”
Still, no major airline has yet determined that it will treat an ancillary sale as incremental, since airlines can sell ancillaries at check-in and even on the plane itself. Follow Kate Rice on Twitter @krtravelweekly.