1. MTBA/OVBTA October 13, 2006 Travel Distribution Fragmentation Robert Langsfeld The Corporate Solutions Group ® Incline Village, Nevada 775-832-5151 rlangsfeld@thecsg.com www.thecsg.com

2. MTBA/OVBTA October 13, 2006 Reality Strikes !! The bills are starting to arrive 80 C /transaction costs ?? Participation $2.00/ticket cost by agency HRG is negotiating individually, but the fee continues to be $1.98, $1.99, etc. CTD’s hit hard –Getting more in to the details –“Been living off of the benefits” Sharing the impact

3. MTBA/OVBTA October 13, 2006 What Are The Issues? New GDS Contracts Pricing Participation Variations Opting In/Out Distribution (aka Content) Fragmentation

4. MTBA/OVBTA October 13, 2006 Travel Procurement Department Online Agencies GDS Deregulation Low Cost Carriers Alternate GDS Direct Connects Southwest TMC Consolidation “Super” PNR Central Collection Location Distribution Revisited

5. MTBA/OVBTA October 13, 2006 Shopping (New Pricing Engines) Selling “Super” PNR Central Collection Location Direct pipeline to airlines Traditional GDS Agent Desktop Traveler Self Booking Tool Financial Management Reporting Non Participants (stand-alone websites or limited res. system participation) DirecNet SkyConnect (LCC’s) ________________ United Airlines ________________ US Majors (DirecNet) New TM Process Options (Air)

6. MTBA/OVBTA October 13, 2006 The Move to Lower Cost Distribution

7. MTBA/OVBTA October 13, 2006 Economic Comparison GDS charge InducementGDS margin GDS costs

8. MTBA/OVBTA October 13, 2006 New GDS Contracts Most of the GDS’s have come to agreement with the Airlines –Participating Airlines –American, Continental, Delta, Northwest, United and US Airways $3.50 per segment “opt-in” agreements Access to content

9. MTBA/OVBTA October 13, 2006 Pricing “Access through participation in the Super Access program incurs an 80 cents per-segment reduction in incentive income for users. The program and costs are comparable to the "full content" programs introduced by Galileo and Sabre.” $3.50, then what do you get in return? Are there any other fees? Are there any offsetting revenues? What about “simple” tickets? What about complex tickets? What about international trips? If you don’t pay, what do you get? What do you pay if the airline is not participating?

10. MTBA/OVBTA October 13, 2006 Participation Variations The major, primary airlines are participating –What do you get? Is the information the same for each of the Airlines, GDS’s? What is promotional, private content? What about the non-participating airlines? “TMC proprietary technologies as a means to shield clients from GDS program fees”

11. MTBA/OVBTA October 13, 2006 Opting In/Out If you opt -in you get full access –But do you? –Promotional, Private, Special Fares? –What else? If you opt-out, what do you know you are getting vs. not? Again, non-participating Plus, these are in reference to the agreements between some of the airlines and the TMC’s –How about you?

12. MTBA/OVBTA October 13, 2006 Distribution (aka Content) To get Legacy Airlines schedules, you new to”play” –But is your TMC playing? “Warner said such CWT-provided technologies as a self-booking tool are "component parts of a holistic, integrated solution.” If the airline is non-participating, then what do you do? Even of more concern, who is watching? –Auditing

13. MTBA/OVBTA October 13, 2006 Fragmentation Now we get in to a real issue If information comes from varied sources, then we are subject to “interpretations” We are just staring out on our journey The TMC’s are offering to “not charge” if you use “this or that” –Now, if you are a current client-no –If you are a new client-yes Ex.- Merchant Model

14. MTBA/OVBTA October 13, 2006 The Future “Things are a-changing” Essentially a cost increase from the airlines to the TMC’s –Make well formulas What is the next step? Steps?? Increased fragmentation Bias Hotels Who is watching who, and why? Ask to see the whole, not just the part they are showing you

15. MTBA/OVBTA October 13, 2006 Breast Cancer Awareness And Education Can Save Lives