For decades, travel agencies were the sales engine airlines never built. The selling part—the art of finding customers, converting them and building loyalty—was never really theirs. That’s where travel agencies, and later online travel agencies (OTAs), stepped in and quickly became the marketing and sales arm of aviation. But today, the very same arm is being ruthlessly chopped off. Airlines were never built to sell. They were never a massive sales organization. Their role has always involved managing the operational aspects—in other words, to move people safely and efficiently across the world. But running complex flight operations is one thing; mastering digital marketing, dynamic pricing and personalized customer journeys is absolutely another. Today, OTAs are finding themselves squeezed and choked by the very companies they helped to grow. In the current (very competitive) market situation, when the oxygen masks fall as the pressure drops, airlines are turning off traditional commissions—the oxygen of agency economics—that once fueled the OTA world. Instead of collaboration, we are now seeing the demand for the ultimate control: airlines restricting content, removing logos and overall branding rights, taking away promotional content and funneling every possible booking toward their own “.coms.” Truth be told, this brewing mess is not good for anyone involved. The skies do not look bright even for the airlines themselves. It really comes down to economics: Over the last 10 years or so, airlines have faced continuous economic and political turbulence. At some point, they opened their P&L sheets and started questioning every single line in there. Read the complete article here.
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