Garner

We’re hosting a “family meeting” in #corporatetravel #distribution! No more sponsored product roadmaps or staged collaborations. Join us for open discussions, spontaneous debates, and candid conversations—no PowerPoints allowed. Got a corporate travel distribution issue to discuss? Let us know! Cory Garner have a 30-minute slot, and we’ll announce more conversations as the event approaches. The last hour will be an “open mic” session—expect memorable moments. This format could be a hit or a miss, but it’s going to be a blast for buyers, #TMCs, #GDSs, #traveltech companies, #airlines, and other interested parties (except media!). Let’s have some real talk!

We thought we were going to post mainly about American Airlines' corporate revenue performance relative to its competitors today but, unfortunately, we also need to talk a bit about accountability. First, the numbers. American's 2024 quarterly earnings reports have featured one quarter entirely under the "old" sales and distribution strategy (1Q24), one hybrid quarter in which the strategy was largely reversed (2Q24), and, now, one quarter entirely under the "reversed" sales and distribution strategy (3Q24). American has said that its "old" strategy cost it $750M of passenger revenue in the first six months 2024. This equates to ~3% of passenger revenue -- certainly something that should be a noticeable number should it return. From a cost perspective, it is clear that American has begun reinvesting a significant amount of distribution costs. We estimate they were up ~20% on a unit basis in 3Q24, likely as a result of channel shift from direct to indirect channels as well as commission rate increases among the "half" of travel agency contracts which have been renegotiated (according to their earnings call commentary). Unfortunately, it is not clear where they currently stand on corporate revenue. Their corporate revenue growth deteriorated relative to ASM and total passenger revenue growth in 2Q24, the last quarter in which they mentioned YOY change in corporate revenue. Because of the concoction of corporate and channel metrics they reported in 3Q24, it's hard to pinpoint exact performance. Inexplicably, this quarter they shifted to reporting change in "indirect channel" revenue while also mentioning the change in "managed corporate" revenue. The problem is that neither of these are "corporate revenue." Corporate revenue encompasses both managed and unmanaged corporate revenue, with much of the latter coming through direct channels. "Indirect channel" encompasses managed corporate plus a lot of non-corporate (especially OTA revenue) and "managed" corporate is 1/3 to 1/2 of all corporate volume according to AA's own estimates. As they say, "What gets measured gets done." If American's "old" sales and distribution strategy and its effect on corporate revenue were the main culprit for American's revenue underperformance, then to us it follows that American ought to use the most representative metric possible to track their progress. Moreover, they ought to report it publicly for the sake of transparency and accountability to their shareholders. Instead of clarity, we have been handed an unsolved Rubik's Cube.

United Airlines has renewed its distribution agreement with Amadeus. What does it mean? Not much, for now. There does not appear to be any material difference in content commitments or #NDC rollout plans. This renewal comes in the wake of United's renewals with Travelport last year (https://lnkd.in/d2-EgAnF) and Sabre Corporation in 2022 (https://lnkd.in/gg8k3_y6). Buckle in for what may be a sleepy year or so in the United States. American Airlines has the most content flexibility in the industry but is not in the mood to use it under the current regime. Delta Air Lines is unlikely to make any waves despite its incremental steps in the direction of NDC. More on the United / Amadeus deal here: https://lnkd.in/gJiFKNY2

With today's addition of Timmo Rol, the Garner Network adds deep expertise in #airline and #corporatetravel technology. ***VERY FEW*** people in the industry have managed retailing transformations at 2 airlines and a major #TMC, giving him 360-degree perspective rooted in practical solutions. With Timmo's help, the Garner team is expanding its airline distribution and retailing offering from research, strategy, and negotiations to also include the practical elements of modern retailing transformation. Reach out to Timmo to find out more about how he can help with organization and architecture design, technology selection, and implementation assistance. Garner's corporate travel clients should also be on the lookout for Timmo on future calls! He has many insights on how best to navigate the ever-evolving landscape of airline distribution and its ripple effects on corporate travel technology. Here is Timmo in his own words! ================= G'day Airline & Corporate Travel Industry Colleagues, With over two decades of experience in airline technology and #distribution strategy at companies like Qantas and Virgin Australia, I have been deeply involved in the industry's evolution towards modern #retailing practices. Additionally, during my time at Corporate Travel Management (CTM) AU/NZ, I gained unique insights into the challenges faced by sellers as the industry transforms to facilitate airline retailing in the corporate space. A critical issue facing our industry today is the integration of modern retailing capabilities (#NDC and Offers & Orders) into existing airline ecosystems. While the potential for personalized, dynamic offers is immense, the challenge lies in implementation without disrupting core operations and facilitating the seamless delivery of new products and enhanced user experiences at the same time. The key to success in this transition is a holistic approach that balances innovation with practical implementation. First, we must focus on solving customer experience pain points across the entire value chain, collaborating closely with our partners. Second, it's crucial to create value, ensuring the commercial viability of our innovation investments. Beyond that, in today's cost-focused distribution landscape, it's essential for airlines to craft, communicate, and take ownership of their brand and product retailing narratives. This approach requires aligning distribution strategies with IT infrastructure and commercial objectives while differentiating your brand in a competitive market. And to you corporate travel managers out there: we at Garner have not forgotten about you! As airlines evolve, so will the platforms you use to manage your travel programs. I am already working closely with the rest of the Garner team to help address the needs of early adopters. I would love to engage in this crucial conversation together. Let's connect on how we can collaborate to shape the future of airline retailing.

Market data and expert input for your business for USD $2,500 per year? We haven't lost our minds. We just want to get to know you! Our "Garner Research" product is changing missions. Starting today, it will no longer be a standalone line of business. Instead, it will be one of the ways we build bridges with our customers. The price of the Premium product has dropped from USD $20,000 per year to USD $2,500 per year, but still comes with all the same features: * Access to quarterly updates of the “Garner Flow” data product for airline distribution analysis and forecasting 👉 Full 2022-2025 historical and forecast estimates 👉 Channel mix by direct vs. indirect, type of agency, EDIFACT vs. NDC 👉 GDS fees, GDS incentives, and airline commission costs by channel 👉 All airlines globally, and the top ~80 airlines individually * Quarterly consultations with Cory Garner We have also introduced a free, limited version of our estimates which includes only 2022-2023. It's the best way to get a concrete view of what our full product can do! Ready to get to know us? Sign up here: https://lnkd.in/gUWDiWi3 ...or reach out to Cory Garner on LinkedIn with questions.

We were entertained this earnings season by the dispute between Sabre Corporation and Amadeus on the topic of whose #GDS #NDC penetration data is more accurate. Here's our independent view based upon our newly updated, proprietary Garner Flow data. We estimate NDC bookings were 1.96% of all GDS bookings in 2Q 2024. Whether the right number is exactly 1.96%, slightly higher, or slightly lower is beside the point. Once we have resorted to measuring the results to the nearest hundredth of a percent, we have lost sight of why #airlines and GDSs invested so much time and energy in this exercise. The reason many airlines embarked upon GDS NDC integrations was to attain a revenue benefit across *all* GDS bookings. GDS NDC deals do not typically result in materially lower booking fees vis-a-vis the deals they replace. Rather, an airline must justify the cost and resource drain of supporting GDS NDC integrations with incremental revenue generation from continuous pricing, bundles, ancillaries, or the like. The promise of shifting 100% of GDS EDIFACT volume to NDC is far from being fulfilled due to structural commercial and technological reasons. Commercially speaking, only the #travelagencies which opt-in to receive NDC content are then faced with a booking-by-booking decision of whether to use it. This cherry-picking of the best NDC content leads to only a subset of a subset of EDIFACT volume being eligible for shifting. Technologically speaking, and as widely reported in the #TMC market in particular, many more systems and processes outside the GDS must be updated before the consumption of GDS NDC content even becomes viable. NDC was never intended to be a permanent, parallel connection to EDIFACT with respect to any individual airline, yet this is precisely how the GDS industry is going about their implementations. We wonder how long airlines will be content to bear all the costs and distraction of GDS NDC integrations without reaping the expected benefits. Rant aside, for those who like numbers, let's dig a bit deeper into our estimates: * Though Europe still led in GDS NDC penetration in 2Q 2024 (2.93%), North America closed much of the gap (2.38%, up over 200 basis points YOY). * The GDSs' share of global NDC bookings doubled to 11.0% YOY, but still trails Direct Connects (66.8%) and Non-GDS #aggregators (22.2%). * While the GDSs grew their NDC volume at a faster rate, Direct Connects and Non-GDS Aggregators were responsible for 2/3 of new NDC bookings. GDS NDC bookings are growing at the expense of GDS EDIFACT bookings, not by the reintermediation of any other channels. * American Airlines and United Airlines accounted for more than 40% of GDS NDC booking growth, and no similar growth driver is on the horizon for 2025. We believe GDS NDC volume will begin to plateau at these very low levels. Did you find our analysis interesting? We have much more data to share! Please reach out to Cory Garner on LinkedIn to discuss.

Ever wondered what an unfiltered Vasu Raja might say if asked probing questions? Now is your chance! Join us Thursday August 8 at 12:00pm ET for our inaugural episode of “Full Content” -- a series of live, provocative conversations with the most consequential people in #travel #distribution. Our host Cory Garner will come with a few of his own questions before turning the floor to the audience for theirs. It promises to be a free-flowing, candid exchange full of insights you cannot get anywhere else!

Are lowest logical airfare policies still logical and reason codes still reasonable? They have been central to travel policies, #TMC processes, and management reporting for years, but now they are being replaced. What direction are #corporatetravel programs moving? It has become more difficult to compare options at the time of booking. Modern airline retailing strategies have given rise to pricing and product differences between EDIFACT, #NDC, and #airline direct channels.  Even the content which still remains in managed channels has become less apples-to-apples. Schedule-led shopping displays are losing relevance while richer comparisons of price, product, and schedule take their place. Reason codes are becoming obsolete as a result. At the same time, travel and expense policies are branching out beyond cost to consider new factors like well-being and sustainability. This applies its own pressure to move away from the traditional schedule-led display and metrics which emphasize cost savings above all else. Where some may see a *problem* caused by modern airline retailing strategies and broader industry trends, we see an *opportunity* to rethink travel programs’ tools and analytics. This is the best way to preserve managed travel’s credibility with the travelers who see our shopping displays and those who question whether our analytics adequately shape the company’s practices, efficiency, and bottom line. Corporate travel managers on the cutting edge are making these adjustments: * New Displays – Modern travel programs are arming travelers with data such as typical or median fares and predictive commentary on fare trends, focusing more on guidance than mandates. A bevy of tools are now available to supplement what TMC, #GDS, and #OBT provide. We advise buyers and program managers to ensure their setup aligns with internal partners and travel policy needs. How do your program metrics drive results at the point of sale or after? What do your providers recommend? * Smarter Analytics – The value of managed travel programs lies in a consumer-grade experience while also measuring savings and compliance. More accurate methods than reason codes have emerged to double check airline reported contract savings. Replacements are required for comparison shopping at the point of sale to populate fare differences and reason codes or even feasible when NDC and especially continuous pricing in place. While some may be hoping we are going back to “normal,” we are encouraged by the programs already embracing change and firmly believe the next changes are even bigger. This is the right time to engage Garner Network members Louise Miller and Kim Hamer from Results Plus Consulting to help assess your value chain across travel, payments, meetings and expense. They specialize in helping innovative travel manager define the new world of multi-channel program design!

American Airlines has sharply reversed its #distribution strategy to mend fences with #travelagencies and #corporatetravel customers. What is likely to happen next? American has adopted a less aggressive strategy than United Airlines, which had been following American at a safe distance. American will scale back its EDIFACT content removal to just Basic Economy. It will add continuous pricing in #NDC later, confirming that it is *not* currently deployed. For the interim they've added a bonus 10% commission on NDC-enabled bundles and paid seats, which is likely of limited benefit to agencies. We assume more changes to commissions, private fare programs, and corporate discounts are happening or will happen. American's main goal is to recover its fair share of higher-yielding bookings, albeit at the risk of advancing modern technology less quickly. American's success will come down to how agencies react, which will likely differ by segment. Here's what we think most would say (in our words, not theirs): 1. #OTAs - "We did our NDC integrations long ago and frankly were never affected by American's recent changes anyway. It's business as usual for us. We'll keep booking AA outside the GDSs for the most part." 2. Brick & Mortar Leisure / Mom & Pops - "We tried to play along and some of us even met American's 30% NDC threshold by April. It wasn't easy. Not all the issues were worked out in our #GDS and it was difficult to get support from American. We were ready to press on, though, considering what was at stake. Now that American is putting everything but Basic Economy back in EDIFACT, we'll probably just avoid the hassle because the incentives aren't worth it." 3. TMCs - "It's like American is putting full content back into EDIFACT again. Our customers ask us to suppress Basic Economy anyway. In the short term, it's more efficient to book American through EDIFACT. NDC might still be the future, but we don't feel pressured to move as quickly. If we move forward with anyone, it won't be American after what they did. We need to see a long-term commitment to a renewed partnership (with lots of money attached!) before we would consider that." Of all the potential impacts, one is clearest to us: American's NDC progress will likely slow dramatically. The bigger question is whether their share of high-yielding bookings will increase materially more than their yields will be diluted by the reinstitution of lower fares in EDIFACT. According to AmTrav, American's NDC fares were 11.2% lower than EDIFACT in the first quarter. To have a noticeable impact on American's overall revenue results, they will have to grow their share of high yield bookings by 15-20 percent -- perhaps from well below 90 percent of fair share to a number which approaches fair share. To us, this feels like a task that may be too tall given the damaged status of American's agency/corporate relationships and lack of staff to rebuild them.

Smaller airlines (<15M passengers boarded) just need a little #airline #distribution help, not consulting overkill! We're here to help. Today we are introducing Garner Express, a "light" version of our airline distribution services tailored to the needs of smaller airlines. It features a more focused product at an inexpensive price point to help these airlines quickly set and execute their distribution strategies. It's packed with value: 1. A 2-month Initial Assessment which informs you of industry trends, compares your channel mix and costs to your competitors, quantifies the high-level financial opportunity, and provides a qualitative evaluation of your strategic options. 2. End-to-end contract negotiation support -- either led by the Garner team or supported behind the scenes -- for your most important distribution contracts. 3. A year of access to the Garner Flow data product for competitive benchmarking, including quarterly reviews with Cory Garner. When purchased as a bundle, the Initial Assessment costs USD $30,000 and contract negotiation support costs USD $20,000 per contract. The Garner Flow subscription is included in the price of the Initial Assessment. If your airline needs contract negotiation support only, the a la carte price is USD $25,000 per contract. If your airline has a major distribution contract expiring between now and the end of 2025, the time to act is now! Please reach out directly to Cory Garner on LinkedIn to get started. Finally, a little extra bonus for current and former airline clients of Garner or Cory Garner: we will offer your airline a one-year subscription (or extension) to the Garner Flow for USD $5,000 (a 75% discount!) for successfully referring a new Garner Express client! Distribution change is for everyone, including the world's smaller airlines!