BTC Questions for Air Canada
The Business Travel Coalition today published questions
regarding the Air Canada (AC) Tango controversy. BTC believes that AC took a
good first step in reinstating Tango airfares in its travel agent portal, but
it needs to take customers out of the crosshairs in its dispute with GDSs. The
questions are designed to help AC better analyze the long-term impacts of its
actions that might seem rational to it at the firm level, but that at
the industry level causes significant collateral damage for all
participants in the distribution chain. BTC encourages AC to consider these
questions and to reinstate Tango fares in the GDSs straightaway.
QUESTIONS
FOR AC’s CONSIDERATION
Customers
- What are AC’s responses to concerns raised by agents and corporate travel managers regarding content fragmentation that is leading to: a) additional cost burdens of searching the AC travel agent portal, or implementing expensive workarounds; b) higher prices paid due to less visibility to fare options; c) compromised traveler security when travelers go to ac.com; d) automated booking strategies being frustrated; e) compromised data gathering; and f) eroding corporate travel program credibility.
- Does AC have concern for the additional service fees consumers are paying due to agent inefficiencies created by forced-use of the sub-optimal AC agent portal?
- Does AC believe that consumers will not vote-with-their-wallets when they realize an apparent objective is to reduce competitive choices by driving consumers to ac.com where comparison shopping is not a functionality currently offered to customers?
- Why are AC’s agreements with the GDSs not forward-looking with respect to a process for enhanced functionality for new products, and absent such a plan, why would AC think it acceptable to hold its best customers hostage as it negotiates a resolution with GDSs?
Competitors
- Why does AC believe that it can succeed with a content fragmentation strategy when such strategies failed outright in the U.S. early this decade?
- Is AC concerned that its actions could drive customers into the open arms of LCC segment airlines just as network airlines did in the in past years with various flawed policies?
- If AC’s Tango action represents the first phase of a fundamentally new distribution strategy, then what does the unprecedented negative reaction of the industry portend for the acceptance of this new strategy going forward?
Government
- Is AC reading the stories of a growing number of Canadian consumer business press who are suggesting that AC does not “give a damn about its customers” and that a possible sea change in thinking about AC is at hand among AC’s various publics that will harm the airline over the long term?
- Is AC concerned that the Canadian government’s evolving analysis might just be that AC seems to possess market power sufficient to override the serious concerns of its major customers who spend millions of dollars annually with AC?
- If major customers are being mistreated, what does that suggest with respect to the average consumer?
- Is AC concerned that the expanding coalition of industry and consumer organizations responding on behalf of constituencies negatively impacted by AC’s actions will support potential legislation to remedy AC’s market power and provide consumers with some measure of buyer protection?
AC
Shareholders
- How has AC’s revenue been impacted by the pulling of Tango fares out of the GDSs, by GDS’ responses and by the shifting of cargo business by some major corporate customers?
- How great of a financial hit has AC taken; how long is AC willing to absorb this kind of marketplace response?
- How could a policy that drives all other industry participants’ costs up, creates so many other problems and institutionalizes displeasure with the airline, be beneficial to AC in the long run?
- Should AC shareholders be concerned about self-inflicted damage to AC’s brand name and public image?
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