Airlines and technology providers this summer plan to start testing new technology that would serve as the underlying framework for airlines to provide expenditure reports and settlement for ancillary and unbundled purchases.
Using electronic miscellaneous documents, which are created for such ancillary purchases as baggage fees, seat upgrades and meals, airlines and distribution technologies have the connectivity to transfer data within airline IT systems like departure control and revenue management. With the newest efforts, the data from the EMDs could be passed outside of their host systems and into data warehouses, including ARC, bank settlement plans and potentially third-party air data aggregator Prism, enabling corporate travel buyers to track ancillary airline expenses.
This month, Farelogix announced development plans for its E-FLX Electronic Miscellaneous Document system with American Airlines and another unidentified U.S. legacy carrier
(BTNonline, April 1). The plans represent "a toe in the water of a very complex standard to implement," said AA director of merchandising strategy Cory Garner, adding that the development "is a more of a fulfillment and settlement technology, a way for agencies and airlines to communicate to one another that an optional service has been sold and for what purposes."
Amadeus plans to begin its own electronic miscellaneous document test phase in the second half of this year with some carriers in Asia, Europe and the United States following more than a year of internal development, said Amadeus North America director of airline distribution strategy Robert Buckman.
The initial phase is based on Amadeus' own pricing engine with a "progressive move" toward the industry pricing standards being set forth by the Airline Tariff Publishing Co.
Even as ATPCo continues to refine standards for filing a la carte or optional services, the International Air Transport Association does the same for ancillary direct and indirect sales and global distribution systems advance their merchandizing options, the industry still is about 12 months to 18 months away from being able to pass the electronic miscellaneous documents data to travel agency back-office systems, according to ARC vice president of marketing, sales and customer care Mike Premo.
American's Garner said EMD implementation ultimately would allow agencies to report on and get involved with transactions made after the initial booking.
That could extend into expense tools, credit card reconciliation routines and potentially Prism, Premo said. Agents also could control the voiding, changing or cancellation of ancillary purchases.
Since most ancillary services are detached from the point of sale, some corporate travel buyers have had a difficult time getting their arms around these growing categories of airline spend. Some such fees are added as special service request codes to the passenger name record, but airlines use different codes. Others are manually entered into the passenger name record in remark fields. On the expense side, the fees can materialize as airfares or as miscellaneous airline charges, with no visibility into what was purchased.
"An individual approach applied by suppliers has made it difficult both on an operational level and on the policy-compliance side," according to Chris Kroeger, Sabre Travel Network senior vice president of global accounts. "There needs to be the emergence of standards that will facilitate the selling and buying of these ancillary products. Electronic miscellaneous documents seem to be a reasonable piece of that standardization."
At last month's National Business Travel Association Financial Forum in New York City, Continental Airlines executive vice president of marketing Jim Compton said, "There is some real industry work that is coming that will allow that to be more robust and transparent."
American Airlines managing director of merchandising and distribution strategy Suzanne Rubin said, "The biggest comment and concern that we've heard from our large corporate customers with regard to optional services is really trying to find a way to track and manage, from beginning to end, the cost of these travel components. We think EMD really provides the foundation or platform of providing a more complete picture."
Rubin noted that picture could include "whether the meal or the checked bags were authorized for that particular itinerary, not just what the charge was, but whether it fits in with the defined corporate travel policy."
"With optional services, carriers are having to determine not only what does it mean to implement an electronic miscellaneous document," according to American's Garner, "but also what is the optional services strategy that goes with it."