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Galileo-Air Canada Pact Stirs Complexity Concern

By Jay Boehmer / September 09, 2007 / Contact Reporter
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An agreement to let Galileo global distribution system subscribers view and book Air Canada's Web-only content has set off a backlash among some in the industry who fear the distribution pact will add complexity to bookings and cost to buyers.

Galileo said it plans to offer the carrier's Web-only content to Canada-based subscribers via a new agency desktop expected to launch by year-end. Air Canada in the past year has released several offerings available only through its Web site—including unbundled, a la carte fares, certain low-bucket fares and prepaid flight passes for corporations—to the chagrin of some GDS-dependent corporate travel buyers.

The offering initially is expected to be available only for Canadian point-of-sale transactions, but Galileo could pursue a similar path in the United States.

Air Canada vice president of sales and product distribution Marc Rosenberg called the offering a "hybrid" between a direct connect and a full-content GDS agreement.

Business Travel Coalition chairman Kevin Mitchell blasted the program as an inefficient workaround that could add costs for Air Canada customers seeking content through the GDS channel. BTC sent a list a of questions regarding the program to Air Canada and Galileo, but said responses were "not encouraging." Unanswered, Mitchell said, are "issues of functionality and cost, and the eventual impact to the remaining efficiencies that exist today for the majority of AC product purchases still facilitated through GDSs."

BTC said the solution "appears to offer an inadequate option for the customer at best," that "potentially makes it even more expensive to source AC products. Instead of efficient distribution through the customer's preferred channel, early indications are that the content AC has chosen to withhold from GDSs will simply be aggregated from the AC Web site."

Sabre also criticized the move last week. "Sabre is an advocate for an industrywide solution that addresses the need for an efficient process that fully integrates within travel agencies workflow, while also addressing the airlines' marketing needs," Sabre said. "We do not believe an API-centered approach achieves this efficiency. It appears what was announced addresses a single airline, rather than an industry standard we have been working with other airline and industry groups to achieve."

However, executives at Air Canada and Galileo said the offering would enable Canadian agencies that use Galileo to view and book travel with the carrier through their preferred source—the GDS.

"I wouldn't call it a workaround," said Jean Collier, Galileo Americas vice president of supplier services. "It will certainly be different, but it's a revolutionary process where we'll be taking content directly from Air Canada through their application program interface. It gives users a much richer experience on the desktop because we have access to a lot more data that we typically would not be able to handle in the green-screen environment."

Collier said although agents currently could view Air Canada's flights and schedules through Galileo, they could not view or book fares or see Air Canada content against other carriers. The agreement, Collier said, gives agents more efficiency than currently available for Air Canada in the GDS channel. "The desktop will look much more like a consumer Web site, because we'll have a matrix display of everything that's available—not just Air Canada, but other airlines as well—based on the information we will take from the GDS to populate the desktop," she said.

Air Canada general manager of product distribution Graham Wareham said the carrier would handle booking and ticketing, while Galileo would handle back-office integration and reporting. "It's an integrated environment," he said. "They're actually in the Air Canada environment when they're in the Galileo environment. There's no going back and forth."

However, Mitchell said, "There are the service issues when live bookings are housed in the airline Web site system. For example, itinerary changes, cancellations and upgrades will be handled by phone calls from TMCs or CTDs to AC. Importantly, there will be no interlining functionality. These services are best practices in modern travel distribution. Without them, travel managers are going to be stuck with expensive workarounds. All the attendant inefficiencies and increased costs of such a proposed model as a long-term solution will directly impact TMCs and ultimately corporations—who will have to pay more, for less service."

Air Canada said booking tools that can access Galileo would be able to access Air Canada content, but only after tools are customized to meet the carrier's display requirements. The first up would be Traversa online booking tool, owned by Galileo parent Travelport.

Air Canada in October 2006 began unbundling flight options through its Web site, allowing travelers to customize bookings by "buying added services or, conversely, to save money by declining benefits normally included in their selected fare type (BTN, Nov. 6, 2006)." Before that, the carrier launched its Corporate Flight Pass—prepaid flight segments for redemption in various geographical zones—as its preferred way to negotiate fares with corporate clients (BTN, Oct. 23, 2006). Travel buyers, however, griped that the GDS took a back seat to the Air Canada Web site, prompting agencies and technology companies to seek workarounds. Concur earlier this year leveraged the same API as Galileo to integrate Air Canada content into its Cliqbook booking tool.

Other carriers, including Ryanair and Spirit Airlines, initiated similar pricing models, breaking out from total airfare fees for such services as checked baggage, assigned seating and frequent flyer points. However, those carriers enabled such pricing options through their Web sites. The major GDSs are in various phases of putting in place tools that allow for the merchandising of airfares through their systems (BTN, July 23).

Sabre last month said it is in the midst of rolling out with Qantas its Sabre Branded Fares product, which is part of a larger effort to allow airlines to merchandize, unbundle and further differentiate GDS fare offerings. Although initially available only for domestic Australian fares, Sabre is in discussions with other carriers in "nearly every market" to leverage the new fare display platform, with plans to make the offering available globally.

The company is rolling out a new desktop interface on an agency-by-agency basis in Australia. Sabre vice president of product marketing Kyle Moore said the company expects other carriers to launch new merchandising options through Sabre Branded Fares by year-end, with eventual integration into corporate online booking tools.

"We've taken the traditional agent workflow and have given them an easy way to capture and understand what airlines may be doing from a merchandising, shopping and selling standpoint," Sabre's Moore said, "but they don't have to leave their traditional workflow to do that."

Sabre last month released with Midwest Airlines features that "allow airlines to differentiate and sell premium airline seats in a coach class aircraft cabin," as a component of Sabre's Distribution Merchandising Suite. However, Air Canada probably will not adopt Sabre's offerings anytime soon. "We've been in ongoing dialogue with all parties," Rosenberg said, "but the only GDS we've succeeded in introducing this concept with has been Galileo."

"Air Canada is the only one that's this far down the path," Collier said, "that's why we're launching it with in the Canadian market. We've had conversations with other airlines, and we'll continue to do so."
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