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A few years after U.S. airlines took from travel management companies the responsibility for loading negotiated fares on behalf of corporate clients, some airline and agency executives are saying the transition is nearly complete. As a result, airlines issue far fewer debit memos to TMCs and oftentimes include automatic rate loading as a standard element of account management.
There are exceptions. Not all foreign carriers perform the task for all accounts, and within the United States, the timeliness of fare filing can be a sticking point, sources said. Moreover, executives at some global distribution system firms suggested there are gaps, especially for airlines' smaller accounts, and pointed to their own products as tools that help TMCs accurately file negotiated fares.
By the early part of this decade, airlines began filing negotiated fares directly through the Airline Tariff Publishing Co.--which handles nearly all published fares--after GDS firms created ways to accommodate newer ATPCo categories. Category 25, or Fare by Rule, for example, allows airlines to directly load client-specific fare formulae rather than rely on TMC tools to accomplish such tasks. At the start, automated fare filing was a point of differentiation for some carriers, especially in their dealings with larger, complex managed travel programs plagued by inaccurate or incomplete implementation of supplier contract terms.
Continental Airlines early last year made automated fare filing a standard. "When Delta's SimpliFares came out [in early 2005] and basically we had to change 800 or 1,000 contracts overnight, one of the things we committed to the agencies at that time--because we knew it would be a big upheaval--was to start filing all this stuff for them," said Kelly Hart, Continental managing director of multinational sales. "And for any new contract from that point going forward, we started filing automatically."
Officials at Delta Air Lines and Northwest Airlines also said their carriers handle fare filing for all corporate accounts. Other major airlines do the same, sources said.
One benefit of this process change is a reduction in agency debit memos, since TMCs are less likely to be responsible for faring accuracy and therefore less likely to get into finger-pointing with carriers and clients. "Debit memos that were generated from manual fare filing efforts essentially are gone," said Jina Sanone, Northwest director of sales programs and alliances.
"Even the staff and resources we have here to address those have gone away significantly," said Brett Zabel, Americas regional project manager for Carlson Wagonlit Travel Air Solutions. "Customers will definitely lean on airlines during the RFP process, saying, 'You guys need to load those discounted fares for two reasons: Number one, we don't want the agency to have to do it, and number two, we want to do risk mitigation with those debit memos.' So, if airlines load them wrong, it's their problem."
Such problems still do arise, according Brad Seitz, president of travel auditing firm Topaz International. "You would think that removing the intermediary would improve accuracy, but it has not, to the degree you would expect," he said. "We see the same number of contractual loading errors as we had five or 10 years ago, whether input by the agency or the airline."
Moreover, some suggested that not all carriers agree to load fares for all accounts. "Getting your fares filed by the carrier is the number one objective for anyone with a negotiated contract, but the truth of the matter is that the carriers, just like any other business, prioritize," said Scott Hemphill, Galileo senior manager for product management in the Americas. "They do not do it for everybody. That leaves agencies with the need for a GDS-supplied solution."
"It is fair to say that a lot of this has been automated, but there are a lot of exceptions," said Neil Fyfe of Sabre Airline Solutions. As a result, Sabre last month introduced MyFares, which the company said "combines robust fare-filing capabilities with a graphical interface that enables agencies to quickly and easily load their private fares." A limited North America release became available in the second quarter with a full release to be ready by year-end.
Other GDS firms offer similar tools for loading negotiated fares and agency contracts--including net fares that can be marked up, distributed to branch locations or sold to other agencies.
Worldspan CIO Sue Powers said airlines have choices when filing private fares. "In some cases, airlines use our SecuRate tool to file things into the Worldspan system when they know their private fares will only be used by a Worldspan customer," she said, noting that airlines in those cases would avoid ATPCo fees. "In some cases, an airline might be filing a Category 25 and a distributor can redistribute that fare using SecuRate, perhaps to their network of consolidators, for example. Both forms of technology can work together."
When airlines agree to take on direct fare filing responsibility, they may not always load negotiated fares as quickly as clients expect. "With certain airlines or alliances, it takes significantly longer," said CWT's Zabel. "If [clients] didn't have discounts previously, they have to go that whole time without a discount. And/or if they have new discounts they are changing to, they have to wait all that time to change those. They do ask for [retroactive savings] sometimes, but the success rate is pretty small."
"There have not been any real problems getting contract fares loaded, but sometimes you have to ask a few times and walk them through the process in terms of getting corporate IDs set up, etc.," added Shane Chapman, director of supplier relations at Ovation Travel.
"It does require maintenance," Northwest's Sanone acknowledged. "We do touch each contract on our end to make the changes necessary, but it tends to not be a problem."
"The biggest challenge, especially with some of the bigger multinational deals that are not fully consolidated, is where they add ARC numbers and pseudo city codes," explained Continental's Hart. "We have a project we are working on internally to get a more regimented process. Even when a client is all consolidated, sometimes certain things are handled from certain branches or there are changes to pseudo codes. That is where the problems in fare filing do come up, because of client requested changes."
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