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Travelport GDS said it made good on its pledge to provide travel agencies with a new desktop solution that accesses all Air Canada's branded "fare families." As a result, those agencies using the Apollo global distribution system now can offer clients various options from the carrier's a la carte pricing structure and conduct comparison shopping--marking the first time such capabilities are available from a GDS provider. Travelport also said it would add the enhanced Air Canada booking capabilities to its Traversa corporate self-booking tool"in the coming months."
Travelport GDS' "full market launch" of the Agencia desktop tool was one of several recent developments in the Canadian market impacting travel agencies and corporate buyers. Air Canada canceled its Corporate Flight Pass program and engaged rival WestJet in a duel over agency commissions.
First announced in August 2007, Travelport's Agenciaprovides access to Air Canada price points based on inclusion or exclusion of various product attributes, including seat selection, checked baggage, meals, lounge access and priority boarding, as well as booking capability for Air Canada's remaining Flight Pass programs. Such content, previously unavailable through GDS providers, is integrated with Air Canada's and other airlines' content normally found in GDSs. "Agencia also integrates with Galileo Agency Private Fares and ATPCo private fares to ensure private and negotiated fares are incorporated into every shopping request," according to Travelport. Agencia also handles refunds and exchanges on Air Canada bookings.
According to a statement from Travis Christ, Travelport GDS president and managing director for the Americas, agent access for much of Air Canada's content previously required "inefficient business practices. Other solutions may bring together GDS and non-GDS products but they do so via screen scraping, which doesn't provide the full view of fares, nor the efficiency and functionality that travel agents require today."
Solutions for the traveler point of sale have been developed and marketed by software providers including Concur, KDS and TRX. Like the Agencia, those systems aggregate all Air Canada content by connecting through the carrier's ac2u application programming interface. According to Travelport, bookings in the Agencia desktop generate passenger name records in the Apollo GDS.
In addition to work needed to bring all Air Canada content to the Traversa self-booking tool, Travelport will use "the learnings of this very positive engagement with Air Canada" to build the Travelport Universal Desktop, expected in 2010, according to Travelport GDS CEO Gordon Wilson. Such development, he indicated, would allow Travelport to "handle the changing manner in which airline (and hotel and car rental) services are being packaged and sold."
Travelport Agencia is available on a subscription basis to Apollo users. According to a company spokeswoman, "There is a licensing fee for access to the technology. We consider specific details on pricing to be confidential."
As travel agents using the Agencia desktop tool connect to Air Canada via the API rather than the traditional GDS link, they earn commissions whenever they book "Tango" fares (Air Canada's lowest ticket prices). Air Canada this month said such bookings (as well as Tango fares booked through its direct agency portal) would earn agencies a 4 percent commission, the only standard commission offer broadly available from the airline. According to a statement attributed to Air Canada COO Ben Smith, the decision to introduce Tango commissions "is consistent with the direction of the new Air Canada team to re-engage our travel trade partners. It is important that every travel professional knows they will be rewarded for providing customers with the best value for their budget."
The Association of Canadian Travel Agencies applauded Air Canada's announcement, saying the airline "has the opportunity to increase its income and market share by increasing traffic with a newly motivated distribution sales force."
The Air Canada announcement followed by about a week WestJet's decision to lower to 4 percent (from 9 percent) commissions on many bookings, including those made via GDSs and an online agency portal, effective July 1. WestJet vice president of culture and communications Richard Bartrem told Management.travelthat "this was a difficult decision to make but, as part of our overall cost reduction program and in a very competitive marketplace, WestJet continuously reviews its programs to ensure we are not at a competitive disadvantage. This is even more important to review during an economic downturn such as we are presently experiencing."
Subsequently, ACTA convinced WestJet not to cut travel agency commissions so deeply; the airline's new commission offer will be 7 percent.
Air Canada quickly responded by upping its Tango commissions to 7 percent. The airline cited positive "industry reaction" and said it would "continue to make adjustments as necessary to ensure we maintain our competitive position with our valued travel partners."
"It is just matching us, so no one loses a competitive position," said WestJet CEO Sean Durfy, speaking June 11 during a Bank of America-Merrill Lynch conference. "We have always had an amazing relationship with our travel agency partners. They helped us build our business model. We were looking at how to reduce [commissions] without hurting the relationship. We tried to bring it down to 7 percent across the board and hopefully that will work."
In other WestJet news, the airline by year-end expects to launch a loyalty program, which would be "a huge driver of business travel onto our network," according to Durfy. "Today, about 25 percent of the business market flies with WestJet in Canada. Business folks need, number one, a great schedule; two, a loyalty program; and three, pricing. [The loyalty program] will give us a strong mandate to increase our business travel for sure."
The loyalty program will follow WestJet's conversion to the SabreSonic reservations system, expected during the fourth quarter. The system will provide new flexibility for the airline, Durfy explained, including the capability to issue "fully refundable Y tickets. Believe it or not, we couldn't do it before."
WestJet currently claims 37 percent of domestic market share, versus Air Canada's 36 percent, and has a 2013 target of "40 percent to 50 percent," according to Durfy's presentation. For transborder service to and from the United States, WestJet claims an 11 percent market share and wants to grow that to at least 20 percent by 2013. WestJet said Air Canada's transborder share is 34 percent, while 55 percent is handled by all other airlines.
Meanwhile, Air Canada on July 1 will discontinue the Corporate Flight Pass program, according to its Web site. The airline two years ago began offering the bulk-purchase option to businesses, which allowed companies to list as many as 300 travelers on one account. According to a spokesman, Air Canada is discontinuing the Corporate Flight Pass program "in order to streamline our overall flight pass product offering. Air Canada will continue to offer a wide selection of consumer flight pass products which are suitable for companies of all sizes." Covering various destinations, flight passes are prepaid, one-way flight credits that can be used within prescribed geographic zones.
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