Travelport CEO Is 'Super Skeptical' About American Airlines Strategy

Call him "super skeptical." That's essentially Travelport chief executive Gordon Wilson's take on American Airline's newest distribution effort, which includes the airline paying agents $2 per segment for tickets booked via its new path. Late last week, the global distribution system CEO spoke with Skift about recent airline moves to create direct connections -- moves that, at least in theory, run counter to the UK-based travel technology company's core distribution business and relationships with travel agencies and corporations. When answering analyst questions Thursday during Travelport's second quarter earnings call and in speaking with Skift, Wilson essentially argued that American's new system is in several ways redundant to what companies like his can already provide. He also argued that it leaves gaps in service that could be avoided if agents continue to rely on Travelport's offerings. "There have always been different pipes in the industry," Wilson said. "There were Edifact-based pipes and XML-pipes and now New Distribution Capability-based vertical pipes. What's changing is what goes up and down the pipes." Wilson said: "There still needs to be something that integrates the pipes together in a way that makes sense for a travel agency, offline or online, for their workflows and the automation to be flexible to support complex client needs. But that piece is always ignored in the conversation airlines have about direct connections. And that piece is something that global distribution systems like Travelport do extraordinarily well, in addition to aggregation and shopping tools." Wilson said American Airlines' quest ignores the fact that travel agencies don't really have the resources to follow through. "And nobody says how that part gets done in the new model, apart from some mysterious idea that travel agents are going to build that stuff themselves with their own IT resources -- which they don't seem to have," Wilson said. "And why replace something that works pretty well? ...That's the bit I'm skeptical about." "The delivery of content through a new pipe as proposed doesn't cause me any horror, concern, or dread at all. But I think the $2 incentive for agents to do all that and handle the pipe and content and then also take on all the automation, redo all their robotics, and redo all their mid-and-back-office systems, and redo all their reporting and inventory management systems, that's the part I'm super skeptical