AFTA UPDATE

THERE is no doubt that the collapse of Fly365.com has come as a shock to the travel industry, and in particular, to AFTA/ATAS.

As a business and based on the information that AFTA had access to over the past three months and in the lead up to last week, there had not been any specific issues identified by the company with AFTA.

The fact that Fly365.com held ATAS accreditation and has done so for a considerable period of time holds true to the fact that something clearly has happened with this OTA in a short period of time to bring about the current circumstances.

As new OTAs look to join the Australian industry, this collapse will engender a deeper look at what and how these businesses should operate.

The race to the bottom on pricing that happens in many of the low cost OTA models is clearly not sustainable, or presents a trading environment that results in collapse.

While I am not suggesting that applies to all OTAs – not in any way, there are many sustainable, strong solid OTAs both in Australia & around the world that have proven that an online channel for the sale of travel is sustainable and profitable. The problem appears to be more in the price driven market place and those who respond as a business model to metasearch price comparison websites. These are not yet well established businesses and while I would hate to think that innovation and entrepreneurship is not encouraged, the point is that a balance between innovation and future business models in travel needs to be offset by criteria that ensures sustainable business practices.

This is something that AFTA will have to review and consider as the ATAS scheme further evolves and can do more to try to provide a platform that can identify these types of risk before they happen.

That said, there is no regulation, legislation, or protocol that can pre-empt premeditated fraud.

While I am not suggesting that may be the cause of the collapse of Fly365.com, it has been the case with previous OTAs who have collapsed and I believe may be a black hole that is opening up in the travel industry led by a furious appetite from consumers to find flights online cheap.

There are many actors in this process and something will have to change and soon or else I believe that these collapses will continue to happen.

This is not good for consumers, not good for the travel industry & definitely not good for airlines.

I strongly believe that everyone in the travel ecosystem wants innovation in distribution, but this needs to be done in a sustainable way within the controls that we have available to us today.

We need to solve this together as an industry, this is not something govts can tackle and I am confident that AFTA working with all stakeholders can achieve great outcomes for the future.