Security
issues were discussed in Detroit at some length. However, the
airline-GDS, buyer-supplier relationships were the main areas
of discussion.
It was
acknowledged that the domestic U.S. airfare structure is no
longer meeting the needs of any of the principals involved.
The airfare structure is overly complex and contributes to mistrust.
Buyers desire a rational and simplified airfare structure and
are willing to consider a range of commitments to airlines in
return for a more sensible airfare structure.
It was
noted that in order to move to a new type of airfare model,
there would have to be significant communication between buyer
and supplier. Currently, there is not a deep reservoir of trust
among principals.
It was
also noted that the airlines need to look at all process and
systems costs associated with "manufacturing," selling and distributing
their products. High labor costs were also mentioned as a significant
factor impacting the current financial crisis in the airline
industry. Buyers do not want to accept the premise that the
industry in two years will be smaller with much higher business
airfares until and unless all airline costs are addressed-including
labor.
There has
been a lot of talk since 9/11 about the need for true "partnering"
among industry principals. It was pointed out that an important
task for the industry is to define what exactly partnering means.
Lip service has been given to partnering for too long. If it
is merely a euphemism for securing higher prices from buyers,
then much opportunity will be lost with regard to fixing intractable
industry problems.
One participant
questioned how the industry could possible get down to the work
of reform when there is so much mistrust and so little effective
communication. The moderator suggested that perhaps those industry
suppliers, distributors and buyers who do maintain and nurture
relationships built on trust and open communications is the
right place to look for leadership.
To paraphrase
former GE chairman Jack Welsh: "Think big, act small, move fast."
This expression would seem to characterize the current situation
in the travel industry. There is a very limited (months) opportunity
for the industry to work together to advance reforms that will
benefit all parties. If we miss the opportunity, we will likely
be mired in increasing complexity and frustration as all manner
of responses and solutions to the current financial crisis are
implemented.
|