GLG News by Transportation Software Experts

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

BCD selects Farelogix for connectivity to airlines

November 17, 2006

Analysis of:Farelogix Hooks Up BCD With Any Inventory’ Access | www.travelbizbuzz.com

For over a quarter of a century, travel agencies have used the Global Distribution Systems (GDS), including Sabre, Worldspan, Galileo and Amadeus for access to airline inventory.

BCD is the world's 5th largest travel agency, and the 4th largest brick and mortar agency in the US.  They are responsible for $12 billion in global sales and have 12,000 employees.  They previously operated as World Travel BTI.  They are part of one of the largest privately held family owned companies in the world, BCD N.V., a Dutch company.

Farelogix is part of a group known as "GDS New Entrants" or GNE's for short.  They provide connectivity to all four GDS companies, a number of airlines directly and airline consolidators.  Their economics are significantly more appealing to suppliers than the GDS.

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

GDS implications of US Air's bid for Delta

November 16, 2006

Analysis of:US Airways offers to buy Delta for $8 billion | ca.today.reuters.com

Yesterday's hostile bid by USAir for Delta has significant implications on the GDS business. 

Today USAir uses the Sabre system as it's inventory and operational system.  Delta has its own system, Deltamatic, which is hosted and operated by Worldspan. 

Should USAir succeed in its bid for Delta, Worldspan will lose yet another customer, as USAir has stated its intention to migrate the reservations system to a single environment (which would no doubt be Sabre).

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

JetBlue recognizes value of GDS

November 2, 2006

Analysis of:Air Canada, JetBlue Diverge on Distribution | www.management.travel

After a summer of "beating" by the airlines in contract negotiations, the GDS' are finally getting some much deserved recognition as a channel.

Last week JetBlue's CEO David Neeleman hailed the GDS channel for the opportunity to attract new customers to the airline and more importantly, to extract higher ticket prices. 

JetBlue is seeing two-thirds of the traffic coming from the GDS channel as new customers and more importantly, is seeing higher yield per ticket.

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

Blackstone puts Financial person as President of Orbitz/B2C businesses

September 14, 2006

Analysis of:Orbitz appoints new President | www.breakingtravelnews.com

Travelport announced today that Mitch Truitt is leaving the company to join a private equity firm (Apax Partners) and Steve Barnhart is being appointed President of the B2C business units, now titled Orbitz. 

Mitch had been largely responsible for the expansion strategy for Orbitz and is a marketing guy through and through.

Steve is the former CFO and industry speculation concurs that this could signal that Blackstone is preparing to spin off the B2C unit from the mother ship.

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

American Airlines lowers the bomb on Travel Agencies and GDSs

July 13, 2006

Analysis of:AA Posts GDS Plan | www.solutionz.com

NOTE:  Article is not available to non-subscribers

Today American Airlines announced that travel agencies that book through "non-preferred" distribution channels will pay a $3.50 per segment fee to AA.

This follows on the heels of the renegotiation of airline contracts with GDS companies (Sabre, Worldspan, Galileo and Amadeus) and the introduction of a new concept known as "OPT-IN". 

Bottom line is that airlines are rejecting the notion that travel agencies using a GDS should continue to receive all their content (fares and availability) without someone paying them for that content.

So the one at the bottom of the food chain - foots the bill.  This could mean that consumers (including corporations for their corporate travelers), pay more if they use an agent.

Now the GDSs have to decide how they will react to AA's move.

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

Blackstone and Cendant Travelport - New Synergies?

July 5, 2006

Analysis of:Blackstone plans to acquire Cendant Travel Services | www.nytimes.com

Blackstone has emerged the successful bidder in a heated race to purchase Travelport from Cendant for $4.3bn. 

The travel unit spinoff was the first in a series of four planned for this summer, to include Wyndham Worldwide (hospitality assets), Realogy (real estate assets) and Avis/Budget (car rental unit). 

The proceeds of the sale will be used by Cendant to pay down debt on Wyndham and Reology units, with hopes of bolstering those spinoffs for shareholders.

Prepared statements imply that Blackstone will leave the existing management team in place, led by Jeff Clarke, former executive from Computer Associates and HP/Compaq.

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

GDS New Entrant ITA is now "New Exit"

June 29, 2006

Analysis of:ITA Software wins deal with Air Canada | masshightech.bizjournals.com

ITA has been heralded as a "new entrant" into the Global Distribution System (GDS) market, threatening to unseat oligopoly veterans Sabre, Amadeus, Galileo and Worldspan. 

Their recent announcement to enter the airline reservations system market signals a major shift in strategy away from distribution to being a true IT company.

ITA had not made real headway in displacing the GDS companies as the system of choice for travel agents for booking travel suppliers (air, car, hotel, etc.).

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

GDS/Airline deals - the ecosystem is breaking down

June 23, 2006

Analysis of:Keeping the hornets contained | www.travelbizbuzz.com

The travel agency channel is a variable cost channel for the airlines.  They only pay them a commission (that is IF they still pay them a commission, which many don't) when they sell something.  Likewise, they only pay the GDS fee when a ticket is sold.

The airlines are trying to discourage the use of the agency channel by reducing commissions and overrides and shifting business to the online channel by tacking penalties on to bookings made via any other channel.

The GDS in large part facilitates sales through the travel agency channel for travel suppliers.  For that the suppliers pay a fee for the aggregation of high value demand.

Over the last 15-20 years, the GDSs have been sharing the airline booking fees with the travel agency community in the form of volume incentives.  The suppliers object to that money flow and are demanding cost reductions.  They have convinced the GDSs to "claw back" a portion of those cost reductions from the agencies.  This is known as opt-in. 

If an agency doesn't opt-in, they don't get the content (schedules and fares and availability) that they need to service their clients. 

John CaltagironeVice President of Supply ChainTHE REVERE GROUP LIMITED

The SCM Software Arena Just Got Smaller

April 27, 2006

Analysis of:JDA Acquires Manugistics | www.mbtmag.com

Another key SCM software provider is gobbled up by a solution provider. What does this mean in the big scheme of things? Higher prices? Less choices in software providers?

Chicke FitzgeraldChief Executive OfficerSOLUTIONZ HOLDINGS

Unsolicited bid received for Cendant's Travelport (TDS) Unit

April 26, 2006

Analysis of:Cendant Weighs Offers for Travel Unit | biz.yahoo.com

The Travelport (formerly TDS) unit of Cendant was previously slated for spin out 3Q06 and may now instead be sold.  Last week the company announced a new CEO, Jeff Cooke.  This could be the shortest reign in history, since he is not slated to begin until May 1st.  

Industry analysts speculate that the value of the TDS unit is $4-$4.5b.  The unit includes B2B brands Galileo, WizCom, Trust and Travelport Corporate Travel Solutions and B2C brands Orbitz, eBookers, cheaptickets, lodging.com and Octopus Travel.

If the TDS unit is purchased by one of the other major Global Distribution Systems (Sabre, Worldspan or Amadeus), there could be implications with the US Department of Justice as it relates to antitrust due to the size of Galileo. 

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