The Beat ~ a travel business newsletter
Danbury, CT
6/14/06 11:25 AM
Citing the possibility of higher fares, increased load factors and greater exposure to the corporate market, JetBlue Airways CEO David Neeleman today gave the strongest public indication yet that the carrier is considering a return to global distribution systems. JetBlue has not listed fares and inventory in any GDS for nearly 18 months.
"We are looking seriously. These global distribution systems are very competitive now, and they are very aggressive," Neeleman said today at a Merrill Lynch conference in New York. "We went back and looked at the numbers, and when we used to be in Sabre, our average fares were higher. And the layering of business above our 80 percent load factor is what can give us a tremendous amount of upside."
When JetBlue at the end of 2004 exited Sabre, the last GDS in which it was displayed, a company official said the airline had been taking just 2 percent of its total bookings through the system. GDS companies have cited their corporate-oriented client bases as a driving factor for higher fares, but in JetBlue's case, the fare boost through GDSs may have been as much a function of its own yield management.
JetBlue business development manager Tim Luceno in December 2004 said, "We were only a Basic Booking Request participant, so users wouldn't see all of our best fares. If they shopped us in Sabre, often we wouldn't be the lowest fare. So, in some ways, it's the way we were participating that wasn't working for us."
This past February, JetBlue indicated that the only way it would return to a GDS was "if the pricing structure was altered in a fairly significant way from what we have historically seen," said CFO John Owen.
At the time, Neeleman said JetBlue would "do a lot more" to appear in corporate self-booking tools, mentioning Sabre's GetThere "and others." But since then, it announced just one new agreement, with Cendant's Travelport.
"If somebody is off in a corporate travel department and their policy says, 'If you are not in the system, we can't book you,' it would maybe make some sense for us to do that, pending the right deal," Neeleman said today, referring to the GDSs that provide most of the inventory accessed by corporate self-booking tools. "We are not opposed to doing that."
It's unclear whether purveyors of self-booking systems resisted JetBlue's preference to connect directly to its internal reservations system or via its CompanyBlue interface, as it does with Concur's Cliqbook. By contrast, the Travelport arrangement involves the Galileo GDS.
JetBlue in October 2004 confirmed it was in talks with Expedia Corporate Travel, but a year later, senior vice president of sales and marketing Tim Claydon said those discussions had not produced a deal. "We've made our position pretty clear to Expedia and others about how the relationship would look," he said. "We haven't found a common ground yet." At the time, Claydon noted that Expedia had been less aggressive than some others on developing non-GDS booking links to airlines.
Danbury, CT
6/14/06 11:25 AM
Citing the possibility of higher fares, increased load factors and greater exposure to the corporate market, JetBlue Airways CEO David Neeleman today gave the strongest public indication yet that the carrier is considering a return to global distribution systems. JetBlue has not listed fares and inventory in any GDS for nearly 18 months.
"We are looking seriously. These global distribution systems are very competitive now, and they are very aggressive," Neeleman said today at a Merrill Lynch conference in New York. "We went back and looked at the numbers, and when we used to be in Sabre, our average fares were higher. And the layering of business above our 80 percent load factor is what can give us a tremendous amount of upside."
When JetBlue at the end of 2004 exited Sabre, the last GDS in which it was displayed, a company official said the airline had been taking just 2 percent of its total bookings through the system. GDS companies have cited their corporate-oriented client bases as a driving factor for higher fares, but in JetBlue's case, the fare boost through GDSs may have been as much a function of its own yield management.
JetBlue business development manager Tim Luceno in December 2004 said, "We were only a Basic Booking Request participant, so users wouldn't see all of our best fares. If they shopped us in Sabre, often we wouldn't be the lowest fare. So, in some ways, it's the way we were participating that wasn't working for us."
This past February, JetBlue indicated that the only way it would return to a GDS was "if the pricing structure was altered in a fairly significant way from what we have historically seen," said CFO John Owen.
At the time, Neeleman said JetBlue would "do a lot more" to appear in corporate self-booking tools, mentioning Sabre's GetThere "and others." But since then, it announced just one new agreement, with Cendant's Travelport.
"If somebody is off in a corporate travel department and their policy says, 'If you are not in the system, we can't book you,' it would maybe make some sense for us to do that, pending the right deal," Neeleman said today, referring to the GDSs that provide most of the inventory accessed by corporate self-booking tools. "We are not opposed to doing that."
It's unclear whether purveyors of self-booking systems resisted JetBlue's preference to connect directly to its internal reservations system or via its CompanyBlue interface, as it does with Concur's Cliqbook. By contrast, the Travelport arrangement involves the Galileo GDS.
JetBlue in October 2004 confirmed it was in talks with Expedia Corporate Travel, but a year later, senior vice president of sales and marketing Tim Claydon said those discussions had not produced a deal. "We've made our position pretty clear to Expedia and others about how the relationship would look," he said. "We haven't found a common ground yet." At the time, Claydon noted that Expedia had been less aggressive than some others on developing non-GDS booking links to airlines.
