It started with an announcement from American Airlines that they had received an inquiry from the US Justice Department whose anti-trust department has decided to look into the behaviours of Global Distribution Systems. AA barely contained its glee in the announcement and just a short while later the GDS companies themselves announced that they, too, had received inquiries.

Does this spell the beginning of the end? No, not at all. In fact, I’ll wager that ultimately there will be no case and the GDS systems will be left alone. But it’s a bit of a black eye in the interim and certainly a PR win for AA (and US Airways) in the meantime.

Ultimately, the GDS systems will have to find a way to lower costs for airlines and a way to make it possible for airlines to customize their product. The truth is, GDS systems have a very old architecture for distributing these airline tickets and it needs innovation.

The best solution for both sides of the argument is working out better arrangements altogether. They still need each other and, at the same time, neither can do without the other’s business permanently just to make a point.

Airlines want to be treated as valued customers rather than as captives to system that has no regard for the changing business models they’re experiencing. This deveolopment may in fact cause GDS companies to start self examination in this respect.

Filed under: Airline News by ajax