Farelogix lighting fuse for new travel technology?

Jim Davidson, CEO of Farelogix, sees his company as having “lit the fuse” for a complete new way for travel suppliers and sellers of travel to leverage disparate technology to get at the source of all travel Data to conduct business without interference from the technology provider.

He said Fairlogix provides travel suppliers and travel sellers distribution platforms that cost less than GDS or aggregating content from any or all sources.

While Farelogix and other in same or similar space (ITA, G2, Datalex…) have been tagged as ‘GDS by-pass’ solutions, Mr Davidson in an interview said that was too simplistic.

 “Content access agreements are between buyers and sellers, not the middle person.  Don’t mess around with their commercial relationship.”   He said. He added:

 “GDS has not let suppliers make all the decisions.  Six months ago the seller was driving the technology and content.  It has now swung to the seller of travel, who says ‘I need more independence on the technology.”

In discussing how Farelogix differs from competitors, he said: “In order to create value you have to create it for both buyers and sellers.”

The momentum toward lower-cost distribution platforms has been accelerating , Mr. Davidson believes.  He estimates it will take another two years for wide adoption of the enabling low-cost type of distribution technology offered at Fareloxig’s, where transactions with disparate sources are stored in a ‘Master Itinerary.

 “When 20% of the transactions on the agency side or 2 million supplier transactions are managed outside the GDS, that will be the milestone,” said Mr Davidson.
 
Considering the four major GDS generate approximately $5+ billion revenues per year, with 60% from air transactions, a 20% slice off this market share is significant, he added.
 
Farelogix charges air vendors a straight per booking transaction fee.  It does not matter how many segments or what kind of ticketing or other factors.  The travel agency and corporate travel side negotiate for payment of an upfront license fee, plus a yearly maintenance fee, which includes upgrades and enhancements and/or a transaction fee.
 
Agreements in both US and Europe have been forged by Farelogix.  Airline agreements are in place with 18 airlines, including Northwest, Delta, American, Spirit, AirTran, and Lufthansa, with more on the way.  Agency agreements include Navigant, American Express, Carlson Leisure Group and Globus.  
 
On the hotel side, Mr Davidson said:  

 “It will start with a couple of properties who want to target their distribution.”  While Farelogix can access the data from any source (GDS and PMS, for example), the challenge is to normalize the data to the booking platform.
 
Farelogix has offices in Toronto and Miami.  Farelogix is funded by Sandler Capital, a New York-based investment firm.

Reported by Charles Kao