Image Source: Boeing Dreamscape
The AP recently pointed out that technology-driven ticketing services are now struggling with airlines that withhold some pricing data from third parties. It explains:
Global distribution systems that supply flight and fare data to travel agents and online ticketing services like Orbitz and Expedia, accounting for half of all U.S. airline tickets, complain that airlines won’t provide fee information in a way that lets them make it handy for consumers trying to find the best deal.
The airlines do usually supply their basic costs to get from point A to B. This stripped pricing, with no extras, is what is needed by travel services to produce an apples-to-apples comparison. Similarly, Tech Planner from Gartner uses basic server configurations to help users come up with ball-park comparisons of the costs of different suppliers. Users can add options from the Tech Planner database to these basic server configurations. But, they should not compare a heavily provisioned server (say, with tons of memory) with a light one from an alternative supplier. Still, the ability to perform objective, baseline comparisons of the costs for different solutions is an important requirement for enabling a healthy market. What online ticketing services aim to accomplish in the travel market is enable a comparison of total travel cost, a variable that IT customers struggle with as well. The airlines want access to online markets – which are enabled by the third-party, tech-driven ticketing services – but they do not want to commoditize options like extra leg room. A perfectly competitive system, which commodities come closest to, earn normal profits. With normal profits, the cost to produce one unit of a good (including management cost, interest on capital, etc.) is equal to the revenue received for that good. There is no extra profit on top of the cost. Analyst spend a lot of time comparing one technology vs. another, and pricing has to be part of that process. As with airline ticketing services, delivering objective pricing comparisons makes the IT market more competitive and drives down the cost for end users.
View Free, Relevant Gartner Research
Gartner's research helps you cut through the complexity and deliver the knowledge you need to make the right decisions quickly, and with confidence.Read Free Gartner Research
Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.