Buyers Press SW For Access

<B> Buyers Press SW For Access</B>

By Cheryl Rosen

Corporate travel buyers continue to pressure Southwest Airlines regarding its firm--but, arguably, misguided--stance against offering its inventory in corporate online booking systems.

Today, Southwest lists its inventory only in Sabre, the nation's largest global distribution system. Corporations whose online systems use Sabre as their GDS therefore can display Southwest schedules and availability--but in those that connect to any of the other three GDSs, Southwest flights do not appear, at least not in real time.

That's a serious issue for a large number of corporate customers--particularly those in the heart of Southwest territory.

"For us, with our headquarters in Baltimore, it's extremely important to include Southwest in any online booking system we roll out," said Black & Decker Corp. travel and meeting services director Peter Buchheit, who said he has delayed the purchase of a booking system precisely for this reason.

"We are definitely going to roll out a system, but I've got a little bit of time before we do. Southwest has been able to skirt the issue of not being in all the GDSs through travel agency bookings (by being available in Sabre), but the fix isn't there in this new online environment. My gut feeling is that this is a different market now. We have Southwest Direct installed in our Carlson Wagonlit travel center, but that's not a workable solution for online booking."

Southwest inventory is available in the Sabre BTS corporate online system therefore--but through a more indirect link, and through Oracle E-Travel, which links into Sabre. But customers using Apollo and other online systems cannot access it at all.

Kevin Krone, Southwest Airlines director of marketing automation, reiterated what Southwest previously told BTN (<I>BTN</I>, Oct. 25)--that Southwest's traditional approach is to encourage customers to book directly with the carrier on its Web site to hold down costs.

"There's no really grand scheme to it other than our desire to have a close relationship with our customers and the cost. We've had some conversations with GetThere.com and they have made a no-cost offer, but the reality is that there is no free lunch," he said. "There's cost no matter what, in administering and keeping any link secure, and all the operational stuff that goes into it. There's a lot of complexity whenever you start adding links to your system."

So, is Southwest not interested in the huge volume of corporate business expected to flow online in 2000? "Not under the existing models," Krone said. "We understand it's a huge market and growing quickly, and that corporations are trying to hold down their costs, as we are. But we have to be careful in coming up with a solution."

That leaves Buchheit, and other corporate travel buyers, without many options. "How many sites do you expect my travelers to go to?" he asked rhetorically. "I have a lot of respect for Herb Kelleher, but this decision does leave a hole in our process. Southwest is excluding itself from a powerful marketplace." Indeed, he noted, "I sent an e-mail to Southwest two or three weeks ago saying this is a major concern and I would like to bring a bunch of travel managers to speak with you guys. And I have gotten no response."

Krone denied an industry rumor that Southwest has an exclusive with Sabre, noting that while "Sabre is our preferred GDS, our relationship is such that there would be no financial penalty for signing with a second."

Agreed Sabre's senior vice president of associate marketing Scott Alvis, "There is no exclusivity in the agreement between Sabre and Southwest. Southwest has made the business decision to go with Sabre, and it is not in their business model to need other GDS connections, as far as we can tell. It is an issue to take up with our customers of how we are meeting their needs and how they will run their business in the future."

Dan Whaley, co-founder and chief technology officer at GetThere.com, the system in which Buchheit is most interested, noted that its technology "runs on top of any GDS, depending on which one the customer prefers or who their agency is signed up with. Twenty or 30 percent of our customers are implemented on Sabre, and those customers can book Southwest."

Still, for those who do not, "Southwest is the sore thumb out there right now. We have efforts underway to open up as many vendors and forms of inventory as possible," Whaley said. "But Southwest's strategy is to limit its participation to hold down costs, and it's hard to argue with that because they have been very successful doing that. But as online booking systems become more and more prevalent--and I think it will--it will become more and more important for them to participate and to be in front of the traveler when the traveler is making a purchase. If Southwest is not on the screen at Chevron or at Cisco, for instance, that will have an effect on their sales."

He acknowledged that GetThere "has talked to them a few times, and proposed terms that would not be unfavorable to them." But the talks have not yet yielded results, despite the fact that "we have demonstrated that among GetThere customers on Apollo, the percentage using Southwest Airlines is decreasing. And if you want to talk about cost, that's a pretty significant cost. It's our impression that it's a favorable business proposal for us to provide their inventory to those customers, and we are very eager to talk to them about that. We're very highly motivated to make that happen."

In the end, Whaley said, "I think that what it comes down to is not cost but strategy. Strategically they feel it's to hook up directly with us. But online booking technology is here to stay, and we have Apollo-based customers that are ramping up their adoption very quickly--and these are all customers that utilize a fair number of Southwest Airlines segments. Southwest is losing market share in those accounts right now. If the only complaint is about cost, then we'll come back to them with a favorable proposal. But I think it's safe to say that cost is not the issue."

But couldn't Apollo-based customers have one Sabre set, and queue all Southwest bookings to it? "It could be done, but there are a lot of issues. If an agency is running two GDSs for a single account, they have to maintain traveler profiles on both; they have issues with interlining; they have issues with keeping a master passenger name record," Whaley said. "It gets pretty messy."

Oracle E-Travel vice president Bart Littlefield agreed. "Southwest's stated philosophy is that they don't want to pay a penny more than necessary, and a link with us is not free. When we suggested they be part of our ETLink program, they said no, though it will save them money in the long run," Littlefield said. "Would they like to establish a direct link? You bet, absolutely. But they've built a very successful business on not spending any more than they need to provide great quality service--though at some point they may decide there's a huge number of customers and potential customers I think they would like to reach."

Worldspan's director of agency sales and marketing Cheryl Weldon said the new version of that system, Version 5.0 "includes the ability to look at Southwest schedules," but not to book.

"We all suffer from the fact that Southwest refuses to talk to us," she acknowledged. Worldspan users also could link to a single Sabre set and "have one person booking Southwest on Sabre all day long. But we call that 'swivel chair technology.' Obviously, it's not technology as it's supposed to be used.