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TMCs ponder UAL's carrot: pushing GDS alternatives.

Article Excerpt
United Airlines' proposal last month to its top travel agency partners regarding use of alternate distribution systems drew mixed responses from agency executives and industry observers. Many praised the airline for bringing new possibilities to the forefront but voiced apprehension about inability to aggregate content, the logistics of moving transaction volume and the economic impact on relationships with global distribution systems and corporate clients. Meanwhile, new distribution entrants G2 Switchworks and ITA Software claim they are building systems that soon will offer agents new features and customer benefits at a fraction of the cost of existing GDSs.

United is offering a per-ticket incentive of up to $5 for early-adopting travel agencies that shift bookings from legacy GDSs to newer systems. Graham Atkinson, United senior vice president of worldwide sales and alliances, last week reported strong interest among top agencies. "We have to look at ways to encourage adoption for an industry which has a different remuneration model than the one we are trying to develop," he said.

To be sure, no one--including United and the new companies with which it is working--expects agencies to migrate huge booking volumes to newer distribution systems in the short term. In discussions with BTN, executives at large travel management companies applauded United's collaborative approach and kept open all options, but generally favored the existing GDS model.

Nevertheless, new options offer the promise of efficiency and the potential leverage to lower distribution costs. Airlines would be primary beneficiaries,...