American Airlines last month began informing corporate and travel agency clients that it will start using a sales and contract management system furnished by the Prism Group. After holding out for years, American joins four other U.S. major carriers and some international carriers in applying Prism's system.
This type of automated contract management—which the airlines have said provides more accurate information when negotiating agreements and tracking client performance—drew a fair amount of criticism when introduced by Continental five years ago
(BTN, Aug. 14, 2000). It since has become a de facto industry standard.
"Those of us who objected did not get support from the rest of the buyers," said one corporate travel manager. "By now, it has been institutionalized."
American is calling its version of the system Contract Management & Measurement. In a "high priority" memo, the airline asked corporate accounts to sign off by forwarding a data release authorization to Prism and each agency of record. Once authorized, agencies would transfer all monthly ticketed data from all points of sale to Prism.
The carrier said corporate customers would benefit from a multi-source database, including traditional and online channels and easily accessible contract performance reports. Like other airlines using a Prism-backed corporate sales system—including United, Delta, Northwest and Continental—AA promised data confidentiality, saying it would not have access to passenger names or credit card information. Moreover, data regarding an account's business on other airlines would be summarized in aggregate only.
Prism president Michael Whitesage said each carrier customizes customer relationship management and salesforce automation components, in addition to data aggregation and decision support functions. "The system moves relationships into an information-rational environment," he said. "It really has improved the discourse on contracting."
Whitesage said airlines use the Prism system to construct relationships with more smaller accounts and to build a complete picture of transactions across all channels, including traditional global distribution systems and Web-based points of sale. "MIDT is a source that has an increasingly larger hole," he said of GDS-supplied market information data transfer. "We are a complete data set."
Most corporate travel managers have accepted this type of system, even if it leads to tougher contract negotiations. "Those with data analysts as part of their travel team know what airlines can divine through this data dump to Prism," said Laurence Smith, a corporate travel advisor and attorney with Wolff & Samson in West Orange, N.J. "If an airline can determine the average cost per mile for a company, over a group of suppliers on any given route or routes, it gives that airline an advantage in bidding for the business. Many customers feel that this data—route-specific revenue data—upsets the integrity of the bid process."
From the carrier's perspective, Prism is "the only game in town," according to Andrew Menkes, chairman and CEO of Princeton, N.J.-based Partnership Travel Consulting. Though he described "a basic argument" against mandated data handling requirements, he credited both Prism for its wide industry adoption and AA for "holding out so long."
TRX and ARC also offer corporate sales data management systems
(BTN, Aug. 25, 2003).Prism's Whitesage said airlines increasingly are integrating business processes with international alliance partners and that most of his company's development is occurring overseas. An announcement of an arrangement with an Asian carrier is expected soon, he said.
United's Star Alliance partner Scandinavian Airlines last month also began using Prism-powered United Corporate Solutions for managing and tracking corporate sales
(BTN, March 25, 2002).