American Airlines' direct-connect push has yet to take off in a huge way, but the BookIt.com agreement shows it ain't dead yet. Old-school GDS protests aside, travel agencies should be able to establish such ties with anyone they want to.
Author: Dennis Schaal
Large travel management companies may have rebuffed American Airlines’ overtures to bypass global distribution systems, but Caribbean package specialist BookIt.com became the latest online travel agency to tie the knot, from a distribution standpoint, with the bankrupt carrier.
Although the official announcement came yesterday, Tom DiBacco, CFO of the Panama City Beach, Fla., OTA, says BookIt.com has been using the American Airlines direct-connect “full-throttle” since the first quarter of 2012.
That means BookIt.com uses the direct-connect for all American Airlines flights, with the exception of a relatively small percentage which are interline flights, and bypasses Travelport’s Worldspan GDS.
DiBacco says through the direct-connect BookIt.com can access the airline’s wholesale and bulk fares and can “pass the savings to guests.”
BookIt.com versus Orbitz
Perhaps this is an example of a pricing advantage: This morning BookIt.com was offering a July 20-27 package for two to the Sheraton Old San Juan Hotel & Casino in Puerto Rico, via an American Airlines roundtrip flight from Dallas, for $1,878, while an Orbitz deal with virtually the same itinerary priced at $1,957.
BookIt.com has been rolling out new markets in Central America, such as Panama, over the last six months, and has “seen a big increase in Caribbean bookings since the direct-connect went live.”
AA”s direct-connect has been anathema to GDSs Travelport, Sabre and Amadeus because they would lose booking fees from the airlines, and many of the largest corporate travel agencies have shunned these direct ties because of concerns about workflow inefficiencies and upsetting the GDSs.
DiBacco says BookIt.com’s agreement with Travelport allows the OTA to establish such distribution ties with AA.
American Airlines so far has convinced Priceline, Vegas.com, Tourico Holidays and now BookIt.com to establish direct-connects. Expedia has also committed to doing so.
DiBacco says American Airlines’ share of flights on the OTA has “increased dramatically” since the establishment of the direct-connect, and “many weeks, depending on seasonality, it ranks as our top airline in sales.”
On the economics of the whole thing for BookIt.com, DiBacco says “it does not cost us more” on a daily basis, although the OTA had to make a significant capital investment in a new technology platform to handle direct-connects.
BookIt.com, and the other OTAs using the airline’s direct-connect, are not yet offering AA’s ancillary services such as early boarding or premium seats, but DiBacco anticipates that could happen in the fourth quarter.