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The TravelMole Interview: Paul Blackney, Worldspan
Worldspan chief executive Paul Blackney has warned of “disastrous” consequences unless the current GDS pricing structure is changed.
It follows Worldspan’s announcement that it is reviewing its pricing structure under Jesse Liebman who has taken on the newly created role of strategic projects senior vice-president .
Mr Blackney told TravelMole that unless action was taken, airlines, hotels and car hire firms would look at other forms of distribution which they perceived to offer better value for money. He said: “We have got to the point – rightly or wrongly – where suppliers believe that the price is out of line with the value [we bring]. I personally don’t think the direct model is cheaper even at today’s prices. But the perception is that we are too expensive which means suppliers are going to look at alternatives.”
Asked what he believed would be the consequences if no changes were made to the current pricing structure, Mr Blackney said: “I think it would be disastrous. The GDSs would quickly find they were made irrelevant as suppliers embrace what on the surface look like lower cost alternatives but in the long run are not. The GDS model is very efficient but if we’re not careful we’re going to drive people into acting irrationally and going for what looks to be lower cost on the surface but where they would actually end up paying more in the end.”
In the UK both British Airways and bmi have said they would consider dropping one or more GDSs unless lower charges are introduced. They argue that they are unfairly paying for most of the cost of travel distribution. Mr Blackney commented: “BA is seen as a thought leader, but in my opinion the thinking of other European airlines is not so far removed [from that of BA].”
Mr Blackney also called into question the willingness of Worldspan’s GDS competitors to consider other pricing models. He claimed: “There are others who like the status quo far more than we do.”
He added that the review – which is expected to be completed later this year -did not automatically mean bad news for agents: “We are not saying who we are now going to charge and who we are not going to charge. We need to look at what we do, who we add value to and what the price should be.”
See previous TravelMole interviews:
11-Jun-2002: Mark Jones, Online Travel Corporation
27-May-02: Oliver Hillel, UNEP
20-May-02: Keith Webber, Telewest
13-May-02: Mark O’Brien, Rosenbluth International
07-May-02: Alicia Gardner, Sabre
29-Apr-02: Carolyn Ezzell, Delta Air Lines
23-Apr-02: John Davis, Pegasus Solutions
15-Apr-02: Gregory Hunt, ABTA Arbitration Scheme
09-Apr-02: Stuart Winter, Atinera
03-Apr-02: Roberto Da Re, Dolphin Dynamics
26-Mar-02: Arnaud Debuchy, Amadeus
19-Mar-02: Helen Baker, Lastminute.com
12-Mar-02: Pat Minogue, Galileo
07-Mar-02: Jon Hart, MyTravel
28-Feb-02: Lawrence Hunt, Rapid Travel Solutions
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