Amadeus to change pricing structure
WTM 2004 Special: Amadeus will soon announce a change to its pricing structure as part of a plan to offer more flexibility to customers.
Speaking at the “Future of the Airline Industry: Transformation” conference at World Travel Market, Amadeus executive vice-president commercial, David Jones, said the global distribution system was obscuring its value to clients by charging one fee.
“I’m delighted to see others considering value pricing and we will address that because we have to look at where we can be more cost effective”, said Jones.
“Through a one booking fee approach, we have hidden what we offer – we hide value by not selling things separately.
“Amadeus is focussing obsessively on improving value, demonstrating value and pricing accordingly and there will be new developments to announce shortly.”
Jones said travel distribution was in a state of transition.
“Anyone that doesn’t add value or is not perceived to add value to customers will end up on the scrapheap of history,” said Jones.
He added that the drive to cut costs and consequently sell direct had been a liberating experience for many airlines because it opened up direct contact with passengers that was not available before.
But he added that full-service airlines had lost the valuable support of agents with its policies.
“By eliminating commissions, airlines have taken away a competitive advantage that they had against low-cost airlines, which have not been sold by agents”, said Jones.
According to surveys airline websites were cost-effective, good for branding and service, but gave poor yields, were not capable of servicing complex itineraries and had no geographical reach. Meanwhile, GDSs had excellent geographical reach, were good for complex itineraries and returned high yields.
Jones said Amadeus was not merely a GDS, but a supplier of technology solutions to the travel industry.
Ginny McGrath
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