JetBlue considering joining GDS (article from ATW)


#1

JetBlue reconsiders participation in GDSs
By Michele McDonald
Travel Technology Update, June 2006

JetBlue Airways is “looking seriously” at GDS participation, according to David Neeleman, chairman and chief executive officer.

At the Merrill Lynch Global Transportation Conference, Neeleman said the airline was missing out on business by not being in corporate travel departments’ booking systems.

He acknowledged that when JetBlue participated in Sabre, the average fares booked through the GDS were higher than those booked directly with the airline. “The GDSs are very competitive and very, very aggressive, so it makes a lot of sense for them to come to us,” he said. Neeleman said the airline was not interested in working with online travel agencies.

“That’s our market,” he said. “If 80% of our business is coming to us on the Web, why would we go into Expedia, Travelocity or Orbitz?”

JetBlue participated in Sabre at the Basic Booking Request level – the lowest available – but withdrew from the GDS at the end of 2004.

Southwest, which also participates in Sabre at the Basic Booking Request level, also recently indicated it would entertain additional participation if the right deal presented itself.

But while the price of participation is an issue, Southwest also is concerned about control over how its inventory is displayed, a factor that also has kept it out of online travel agencies. GDSs “always approach us on the cost issue but forget the control side,” Kevin Krone, vice president of interactive marketing.

Meanwhile, 70% of Southwest’s bookings are made via southwest.com, chief executive officer Gary Kelly told attendees at the Merrill Lynch conference.

In other highlights of the conference: ᅬ Jeff Misner, executive vice president and chief financial officer of Continental Airlines, said sales on continental.com have grown from 28.% of the carrier’s bookings in first quarter 2005 to 57.6% in first quarter 2006. “But it’s not the only channel we’re focusing on,” he said. “Our emphasis is not to drive everybody to a cheap channel, but to an appropriate channel.”

For example, he said “we’re fine with travel agencies” because they produce higher-yield tickets. As for GDS fees, he said, “we’re making good progress in bringing that cost down.”

Overall, Continental’s distribution costs as a percentage of passenger revenue have decreased from 7.5% in 2002, the year in which base travel agency commissions were eliminated, to 5.7% in 2005.

Sam Gilliland, chairman and chief executive officer of Sabre Holdings Corp., said Sabre Travel Network’s new contracts with airlines ensure that “if we indicate we are providing full content, that’s exactly what it is.” “In our DCA-3 contracts, we had in essence what we would call full-content agreements, but I think there were cases where you could say the definition wasn’t as strong as we liked,” Gilliland said.

In conjunction with the new airline contracts, Sabre is offering travel agency subscribers the option of access to full content in exchange for reduced incentive payments.

Because Sabre is developing “new economic relationships with our travel agency customers, we had to be careful as we’ve structured our new [airline] agreements” to ensure that full content means exactly that, Gilliland said.


#2

I’d really like jetBlue to get back into, and Soutwest to get into, GDS. Both of their web interfaces are terrible compared to some of the aggregators like itasoftware.com.


#3

I find Southwest’s web site extremely easy to use. JetBlue’s was easy but not as easy on the eyes. The font size on Southwest is also better than JetBlue for the “fine print.” (Yea, I know I can change the font size in my browser but why should I have to do that?)

I like the way Southwest shows all of the fares available for each flight. Just check a circle. Southwest also has a low fare finder that is great if your plans are flexible.

Southwest also has a program called Ding that gives you very low fares. I just used it today. My original flights between OAK and LAX were $69 each way. I cancelled that reservation and got the same flights for $30 each way less. I now have a $120 credit. On the airlines, I’d have had a substantial percentage of that taken away.

Southwest is the ONLY airline, at least in the USA, that allows you to use the full value of non-refundable fares as a credit towards a future trip. The other airlines, including JetBlue, charge a cancellation/cancellation fee. Southwest does make you pay the difference between your fare and the full fare if you want to catch an earlier flight.


#4

The fare display at Southwest is nice, but at both sites the other time/date/airport search options are pretty meager.

If I want to see time/price options on two days for departure and two days for return, I have to do four queries at jetBlue or Southwest. At matrix.itasoftware.com I do one.
If I want to see the cheapest weekend to take a vacation in the month of August, with flexible departure (Thurs or Fri) and return (Sun or Mon) dates, I need to do about 16 queries at jetBlue or Southwest. At matrix.itasoftware.com I do one.
If I want to compare fares and times at different airports in the same metro area, I have to do 10 or more queries (my arrival and departure airports may be different). At matrix.itasoftware.com I do one.


#5

Did you use the shortcut to low fares at the top of the page? It showed all available fares for a given month.


#6

Dohop.com is an interesting site. Put in your citiy pair and it will find fares for all airlines. You will need to go to the airline’s web page to actually purchase the fare. That’s what I would do, anyway, if I was using Orbitz or Expedia so I could avoid the booking charge that those sites charge.

It also has a page on travel deals and another page showing worldwide country, airports, cities, and airlines information.


#7

Pretty site, but the flight database seems to be rather lacking. It claims there are no flights from BOS to SBA on Aug 8.
I’m used to the book-at-the-airline routine, since ITAsoftware doesn’t let you book tickets either. Booking with the airline usually earns a few extra frequent flier miles anyway, and avoids the service charges as you mentioned.