TravelMole eWire Q&A with Travelport’s Patrick Lukan

Patrick Lukan is general manager UK & Ireland at Travelport GDS 

Q: What do you think the air market will look like in five years time?

A: As someone who has been in the airline and GDS industry for a long time, I have to say that five years is a lifetime! I expect we’ll see the biggest changes in the long-haul and super long-haul markets, many of which you see unfolding currently in terms of aircraft types and onboard amenities. The emphasis, certainly for passengers, is not about just getting from A to B, but doing so as quickly and in as much comfort as possible. Obviously, the whole issue surrounding the price of a barrel of oil will have an effect on air travel in the future. Fuel efficiency is an increasing important concern and airlines will have to take a decision on whether they can realistically pass on high oil prices to consumers. The bottom line is that the laws of economics will continue to exist in the airline industry.

Q: What are your views on the rise of the super airline?

A: Travellers want to get from Boise to Berlin and beyond – we live in a globalised world and global airlines cannot afford to simply limit the scale of their offering. Whether it is through consolidation or alliances, the players that are best able to demonstrate they can cater to the needs of passengers are the ones that will prosper. It’s up to the competition authorities to balance the health of the airline industry with the interests of the consumers in terms of what a reduction in carriers does to fares.

Q: How will the role of the GDS alter as air market evolves?

A: The GDSs continue to offer considerable benefits and value to airlines. By definition, the GDSs are global and provide distribution in ways that are ever more important in a global marketplace. An airline can’t afford only to distribute their content in their home markets. For example, a UK-based carrier with an international route structure needs to sell its products as efficiently in every country it flies to, be it Australia, the US or Brazil.

The role of the GDS has to continue to provide value to the distribution channel.  I believe we have demonstrated that we are evolving by building the technology to help suppliers sell their products the way they want and not the way the traditional GDS was engineered.  And on the other end of the supply chain, we provide travel management companies and travel agencies the tools to effectively and efficiently sell travel products in a global marketplace.

Q:  How will rail play a part in travel in the future?

A: The ‘green effect’ has already prompted both business and leisure travellers to choose the train, so being able to distribute rail is an important part of our product portfolio. It’s probably true that the UK’s rail infrastructure has some way to go in terms of improvements, but as an American living here it seems like the service is still pretty good compared to the US. The biggest issue has to be that rail providers are starting to price themselves out of the equation. If you are a business traveller and need to get from London to Manchester it can be cheaper to fly and certainly is cheaper to drive. People want to do the right thing for the environment, but not when being green really hits them in the pocket.

Q: Will GDSs ever regain full content? If so, how?

A: I’d dispute that we’d ever lost full content. We still have a majority of the world’s airlines, hotels and car hire firms participating in the GDSs. But I think it is more important now that we secure content that is relevant to the market place and we find out what is relevant by listening to our customers. We have innovated by getting the content of low-cost carriers and we have lots of innovation on the cards in the hotel market and with specialised products such as chauffeur-driven cars.

Q: How will the economic downturn affect your business over the next year?

A: Obviously GDS use is tied inextricably with the demand for travel. I’d like to think I’m an optimistic realist – I’m not going to talk the market into a downward spiral – but things will be challenging over the next year at least. All travel businesses will have to ensure their costs are under control, and using a GDS can bring savings. As a business we have cut our cost base and improved efficiency by bringing certain Galileo and Worldspan operations together.  The recent consolidation of our data centre operations in Atlanta is a great example.  We intend to work with all of our customers to weather the economic storm.

Q: What are corporates and TMCs asking for in this new era of financial downturn?

A: They want ways to be efficient and to use technology as a way of reducing their costs to serve. This has been at the heart of the Travelport proposition in the UK. We’ve grown the teams involved in consulting with customers and developed a number of bespoke solutions for clients in response to their feedback. Our emphasis has been on reducing costs for clients – products such as Rapid Reprice, which can deliver time savings for staff and reduce errors and therefore reducing ADMs, make a real difference. At the end of the day, it is about providing a service at a price point that your customer values.

Q:  Corporates are notorious for demanding SBTs and then not using them. What’s your strategy for changing this?

A: I’m not in the business of pushing self-booking tools on corporates. Our job is to give TMCs the tools that allow them to best manage their customers and for them to service these customers in the most suitable way. We want to be in any channel that supports the booking and I am not trying to tell the traveller how they have to book their travel. Providing a corporate booking tool is very different from getting the traveller to adopt it.

Q: Now EasyJet has lowered its point of sale fee, have bookings picked up?

A: The feedback we have had from TMCs is that the lowering of the fee has been a positive move. We have seen increased booking volumes, but the numbers are still lower than we’d like. By the end of the year we will have introduced new functionality that allows agents to modify EasyJet bookings and this will be another time savings feature which we believe will help increase the volume of bookings. 

by Dinah Hatch