Air transport : where do travel agencies fit ?

Airline companies are making tremendous efforts to streamline and find the road towards profit.

It was urgent to rethink this sector that has taken too long to react to new developments of airline companies, in this sense I’m talking about the "low cost” trend.

None of the leaders wanted to face the incoming danger, convinced that only their traditional method of operation and management was appropriate.

They took too long to respond and instead of putting that time to good use to lighten their loads, they have instead maintained their old strategy, particularly in terms of staff management.

Thus, airline companies continued to recruit for years when instead they should have been smoothly reducing their amount of personnel.

They were finally forced to operate violently and, even for some like American companies, had to opt for the "chapter 11" phase, in other words, filing for bankruptcy.

An embarrassment for those who have been setting the rules for the whole world to follow!

But the world has not changed only for airline companies. Distribution techniques have also evolved considerably, I would say they have been completely transformed.

First with the Internet influx, which led carriers to think they could handle distribution themselves, without going through an outside retailer.

Leading them to develop their own merchant website and cutting the commissions to travel agents, something they had been wanting for decades.

And then, the widespread use of electronic ticketing, which dematerialized ticket use.

This has finally changed nothing of the balance of power except to give travel agents the means to weigh more heavily on prices, which led to a deterioration in the revenues of about 25%, greatly hurting the sector already in a bad financial state.

Whatever we say, travel agents continue to represent 70% of air transport sales and are therefore essential to the vitality of the sector. But since technologies have greatly evolved, it is not the same intermediaries who get a piece of the pie.

Large amount of sales are made by "online" travel agencies, those who base all of their services on the Internet and in constant search for lower prices, and always aided by ever more powerful search engines.

However, the original model of travel agencies is not evolving, if anything it is slowly disappearing. There is a new field of interest: that of improving quality.

It is now more than ever the time to be active if we want this profession to find a second wind.

However, it is not clear where the creativity and research is going to emerge from. Is there a center where travel agents could exchange experiences and ideas?

It certainly exists, but it seems that everyone is rather working individually. Where are the places where airline companies and retail players could calmly discuss? How could they work together to integrate these new technologies? How to use them for the benefit of all?

We can always complain about Google’s expected arrival in the sector, which represents over 700 billion dollars. But won’t Google’s technology be available to all?

The only real interface between air travel and clients remains the physical travel agency, its presence out on the street gives customers information and reassurance without having to go through onerous “call centers.”

Yet we must still pave the road towards profits. It will not happen on its own. We will need to experiment with new formulas that may not always succeed. We need to think beyond the French market in order to be able to handle different practices from our own.

And we will have to find a way to discuss on the same level with airline companies and in particular with the IATA . But for this we must conceive a serious plan of action.

The delegations of any country all still have very little influence in comparison to such a centralized organization like the IATA. Only travel agents can still expect global representation.

In short, there is surely room for a dynamic distribution circuit that would find a way to be lucrative while bringing in a profitable share to airline companies. Who will take the initiative to find it?

Jean-Louis Baroux, is the former president of APG (Air Promotion Group) and the creator of the CAF (Cannes Airlines Forum) which became the World Air Forum.

Air Transportation Specialist, he signed at L'Archipel Publishers ''Compagnies Aériennes: la faillite du modèle” [“Airlines: A Bankruptcy Model” – translator’s note], a book that all tourism professionals should have read.

The copyrights will be donated to charity. It can be purchased at: www.editionsarchipel.com