Priceline CEO Jeffery Boyd said he expects the agency to distribute airline content both through global distribution systems and direct connections. Other large travel agencies around the industry likely will pursue a similar strategy, he predicted.
"The market going forward for airline connectivity will be a mixed market, where there will be some direct connects like the one that we announced with American Airlines, but also a very significant flow of ticketing through the GDSs," Boyd said on Wednesday during Priceline's earnings call.
"Because they represent such a large and important distribution channel and because they have economies of scale, over time if there are other products, ancillaries and functionality being made available on a direct-connect basis, I believe the GDSs have the technology and the will to provide that functionality to their agency customers as well."
In the "mixed model," Boyd envisions, "some airlines may choose to connect with a large agency through a direct connect, but many other airlines will operate through the GDS, and big travel agents like us will operate with both."
Former Air Canada distribution executive Marc Rosenberg offered a similar view of a blended approach. That AA wants to cultivate direct connections "with some or several of its key clients should come as no surprise to anyone, and especially not the GDSs," he wrote on TheBeat.travel blog.
However, that should not be construed as an AA decision to abandon GDS distribution, he added. "I don't recall seeing or hearing that AA is looking to withdraw from the GDS model. AA wants to engage in a different kind of relationship with certain clients, and it should be free to do so."
Priceline for the fourth quarter of 2010 reported net income of $135 million, up from $78 million a year earlier. Revenue rose 35 percent to $731 million. Gross travel bookings, representing "the total dollar value, generally inclusive of all taxes and fees, of all travel services purchased by consumers," jumped 44 percent to $3.26 billion.
This report originally appeared in the Feb. 24 issue of the Beat, a sister publication to Travel Weekly.