In the latest development, American Airlines said it had signed a new distribution pact with online travel agency priceline.com, clearly a retaliation against Expedia for pulling out its inventory.
A report in the Wall Street Journal said that “the website of Priceline.com Inc. will get the carrier’s fares and schedules directly from American instead of a global distribution system, or GDS, which has long acted as a middleman between airlines and travel agencies”.
Calling it “one battle in a very long war”, Jones told WIT this particular war has been going on for 20 years. “Ever since the GDS could charge a fee, the airlines think the fee is too high and the GDS think the fee is too low.
“Right now, as things stand, I think they will settle. American Airlines is out there alone and no airline has jumped behind it. Usually if one moves, the others follow – maybe they will.”
Jones, who is currently chairman of Kayak, said he was sure “a lot is happening behind the scenes. American Airlines will get what it wants and the GDS will give up something.”
Although he acknowledges that things have changed enough in distribution technology for airlines to take a stronger stand against the GDS, he said, “I still don’t think the technology is there yet.”
Asked what he thought was the missing piece, Jones said, “It is one thing to connect to one airline but if a travel agent has to connect with each airline, where’s the central repository?”
And so enters the spectre of the Google-ITA marriage? “There are a lot of issues with that,” said Jones. Kayak is one of the companies behind theFair Search movement which is a protest against the Google-ITA deal.
“I don’t think everyone’s ready to shift completely. Airlines complain they can’t display their product the way they want to and GDS say we can do that but the airlines say, not good enough. I think this will all lead to something better for everyone.”
In the end, Jones, who also worked with Sabre and American Airlines, said it was an argument about price and control. “I think they will settle,” he reiterated.
• More on Terry Jones, who started life as a travel agent, in the next post
• For the full background on the American Airlines saga, read this
