AA Revamps Portal For Direct Bookings - Business Travel News

Share this page

Text size: A A A

AA Revamps Portal For Direct Bookings

December 05, 2005 - 12:00 AM ET

By David Jonas

American Airlines last month said it would relaunch its corporate booking portal, the latest attempt by a carrier to reduce distribution costs and make its content available in new managed-travel channels. Yet, airlines are contemplating withholding content from at least some traditional distribution channels as they favor direct models and assess alternative distribution systems. Many travel buyers are watching closely to understand how such decisions would impact airline ticket purchasing at their companies.

Though positioned as unrelated to next year's expiration of the airline's existing GDS agreements, American's CorporateAAccess portal would divert corporate travel bookings away from traditional global distribution system channels. American's portal targets companies with less than $1 million in air spend and is powered by Orbitz technology through an agreement with Cendant, owner of the Apollo/Galileo GDS. United Airlines recently announced a similar deal (BTN, Oct. 17).

Thus far, AirTran (BTN, Nov. 14) and, more thoroughly, JetBlue (BTNonline, Dec. 10, 2004) are the only sizable U.S. carriers to reduce the number of global distribution systems listing their content since the federal government deregulated the domestic GDS sector in 2004, though other majors are contemplating such a strategy (BTN, Aug. 1).

"There is a bit of nervousness on distribution plays that may be occurring," said American Airlines vice president of global accounts Frank Morogiello, acknowledging that the carrier's top corporate accounts recently conveyed to him their concerns over access to full content. "We have a strategy, and they are part of it. Of course, we want our inventory available for our best customers."

Some of American's current GDS content obligations do not expire until the end of next year, but according to AA vice president and general sales manager Dave Cush, "It is neither in the airline's best interest nor the GDSs' best interest to allow the expiration of these agreements to creep up on us. The commitment we have made, in particular to our corporate customers and travel agency partners, is that our full content will be available in multiple channels, including multiple GDSs and some of the new entrants, but not necessarily all of them."

Cush also noted that a large portion of more than $100 million in targeted overall distribution savings would be generated by "a reduction in GDS fees, which we expect would be rather substantial once the content agreements expire."

CorporateAAccess is designed to contribute to cost-savings targets. The direct portal by mid-2006 would combine the interface, user experience, capabilities and content availability of aa.com and Orbitz for Business. Similar to the United initiative, the AA portal would include content from other carriers and both public and negotiated rates from hotel companies and car rental firms. "Essentially all remaining content they have on Orbitz for Business," AA's Cush explained.

He said American is not risking much by listing inventory from competitors: "First, we are generally competitive on price. Second, it will be listing our service with whatever negotiated deal the corporation has—some natural biasing in that manner—and third, the consumers are looking for convenient places to find the product, and if we put obstacles in their way to finding the product they are looking for, that does not help them or us." Furthermore, non-AA airline bookings, like non-United bookings made through the United corporate portal, incur a booking fee.

Also like United, American will load any negotiated corporate fares, which include "exclusive content based on negotiated fares with each corporation" available only through the CorporateAAccess Web site.

Unlike United, Cush said AA would "negotiate with each entity individually, and if it appears that a discount makes sense, we'll load the discount for that corporation appropriately. Nothing blanket." United's offer includes a standard 4 percent discount off all published fares.

Now being tested "with several key accounts," CorporateAAccess includes traveler tracking, refunds and exchange functions, traveler profiles, multiple-passenger booking options, flight status notification, online seat selection, 24-hour support, real-time traveler data and enhanced reporting "that supports easy integration into existing back-office systems."

Cush said travel management reporting is based on booked revenue, rather than flown revenue. Capabilities to handle American's bulk-buy AAirPass program may come in a later version.

The initial CorporateAAccess program launched in mid-2003 (BTN, Sept. 8, 2003). It was powered by a corporate booking engine from Accenture subsidiary Navitaire and did not have international capabilities or inventory from other airlines. Unlike the new system, it charged both implementation and transaction fees.

In addition to American and United, several other airlines—both domestic and international, either independently or with alliance partners—operate or plan to operate direct corporate portals.

According to Worldspan chairman and CEO Rakesh Gangwal, however, a direct-distribution strategy is not necessarily as cost-effective as airlines suggest. "I truly believe that airlines do not understand the total cost of servicing their own Web sites," he said during a conference call last month. "Add all the different incremental costs—the passenger name record, the transaction processing—and it is pretty significant. The costs are fragmented across different parts of the company."

Nevertheless, AirTran exited the Worldspan system and now it is working with several parties—including Carlson Wagonlit Travel, G2 SwitchWorks and WorldTravel BTI—to enable corporate clients to make use of the various benefits that are available through the carrier's A2B corporate program by hooking those entities into its application programming interface.

"Some of those things wouldn't happen in legacy GDSs," said AirTran vice president of planning Kevin Healy. He noted that both Sabre and Cendant—GDS operators with which AirTran recently has negotiated content deals—are working on new technology to similarly allow such functionality. Healy also said such corporate booking tools as GetThere and Travelocity Business, both under the Sabre umbrella, "will probably get there before some of the other tools."

AirTran also offers direct corporate bookings on its Web site, but does not heavily market the functionality. Meanwhile, the carrier's participation in Amadeus is scheduled to end Dec. 15 unless a new deal is reached.

Due in part to the termination of its Worldspan agreement, AirTran also no longer is available through online agency Expedia. "We do not feel as if we need to do all things for all people," Healy said. Nevertheless, he said AirTran and Expedia currently "are working on alternate means of enabling Expedia Corporate Travel clients to make reservations."

Southwest Airlines and Expedia Corporate Travel this year worked out a similar arrangement (BTN, June 20).
This page is protected by Copyright laws. Do Not Copy. Purchase Reprint

Leave your comment:

Comments

blog comments powered by Disqus