Hahn Air's Jorg Troester talks:
- Filling the distribution & settlement gaps for small airlines
- Adding new airlines in 2019
- New Distribution Capability opportunities
As an Germany-based airline with a small, mostly charter business, Hahn Air is not a carrier most corporate travelers will fly, but a large number have used Hahn Air's tickets. The company's major business is its ticketing services, in which it uses its own connections to global distribution systems, as well as Airlines Reporting Corp. and global billing and settlement plans, to facilitate ticketing for a large network of airlines around the world. Over the past 20 years, that network has grown to more than 350 airlines, including small regional carriers like Massachusetts' Cape Air, low-cost carriers like Romania's Blue Air and even some large full-service carriers like Emirates. It connects with about 100,000 travel agencies, including more than 8,800 agencies in the U.S. Hahn Air head of corporate strategy, industry and government affairs Jorg Troester spoke with BTN transportation editor Michael B. Baker about the ticketing model, growth this year and what the International Air Transport Association's New Distribution Capability standard could mean for Hahn.
BTN: How do you facilitate bookings via the GDSs?
Troester: Hahn Air's tickets are fully integrated in the GDS system that the travel agents are using: Galileo, Worldspan, Sabre, Apollo—all the big ones in the world. Travel agents can find, at their working desk or at their terminal, flights they would not usually be able to sell—small airlines from the end of the world and their schedule and availability—and make a booking. When they try to validate a booking by issuing a ticket, they realize that this airline does not have its tickets available in ARC, in the local market. As a fallback, the system usually automatically chooses a Hahn Air document. The travel agents [thus can] sell flights they can see but not ticket. The customer is happy because they can go through their trusted sales channel. For the airline, it is a win because the airline has incremental revenue in markets where they usually would not be able to sell.
BTN: What is the mix of agencies with which you are working?
Troester: Online travel agencies is one of the biggest shares, 40 percent, and [travel management companies], as well, but we have smaller travel agencies, as well. Sometimes you have smaller agencies who are highly specialized in a region or product or are even creating their own tools and will need those flights that are not available. The nice thing of the Hahn Air services is that it is fully integrated into the GDS, so the travel agent on a management level and process and organization level does not need to do anything they would do otherwise.
BTN: What growth have you seen so far this year in membership?
Troester: In 2019, the first two quarters, we had 22 new airlines that joined the Hahn Air network, which is a huge number. The number should be similar [for] the end of the year. There are a lot of airlines in the pipeline to be implemented. Air Greenland is one of the nicer ones, and Cyprus Airways, Donghai Airlines from China and KBZ from [Myanmar], so there's a wide mixture. From those 325 carriers for the U.S., or 350 in total, 280 airlines [have connectivity on at least one GDS and] can be issued on a Hahn Air document. The others are not only being issued on a Hahn Air document but we are helping them to get their schedule and availability from their own reservation environment into the GDS. For example, there are low-cost carriers that know how to do direct distribution and sell through the internet booking engine in their core markets, but at a point, they come to a level of saturation and need to look to new distribution channels. Indirect distribution comes with a certain complexity. They say, "Yes, we need these new channels, but the complexity would raise our cost at the same time so much that it is a difficult calculation as to whether we should do it or not." They are taking their schedule and availability and giving it to us, and we put it in our own CRS system that is connected to the GDS under the code of H1. Thus, we are bringing more content into the GDS.
BTN: Do you have a strategy related to NDC?
Troester: Absolutely. We have a project group in the company working on our NDC platform. Hahn Air employees and members of the Hahn Air team have been a part of the IATA NDC group from the beginning. For us, it is more important and interesting to see what kind of opportunities the travel agencies will have in the future, that all the ancillary products and other things will be right in front of them on the screen, not doing a reservation in the GDS and going online to do a seat reservation. We see a lot of possibilities here, and now that the NDC standard is out there and has been used a couple of months by airlines to serve punctual business cases, it's very interesting to see how this slowly goes on. Obviously, the Hahn Air perspective is [on] having a global platform, so we were sitting a little longer to see how this is developing. And now we are working on our own platform. In the third quarter or fourth quarter, you will be hearing something about that and some other exciting things we have in the pipeline. Our own airline partners—the variety is so big not only by business model but by culture. An airline in Southwest Asia has different ideas of how to sell and what to sell than an airline in North America, for example.
BTN: What sort of services come with your tickets?
Troester: We have a service desk available 24/7, and agents can contact us by telephone or email whenever they have problems with a Hahn Air document, revalidation or other questions. We are doing this in 10 languages, for all 190 markets. The insolvency insurance, Securtix, is something the agents appreciate. Selling a flight off an airline from the other end of the world might be something where you don't have the usual trust level. Agents are working a lot from experience and trust and know exactly what they are selling, but if a customer comes in with a request and you are selling something [that is], from your perspective, exotic and you don't know whether it will work out or not, Hahn Air is promising to the travel agents: In case this airline goes into bankruptcy, we will refund the ticket value to the travel agency or at least the unflown part of the ticket. We offer an [agent debit memo] waiver. Sometimes the ticket was wrongly calculated, and there are some regions of the world where the travel agent, when he or she [makes] a mistake, will have to pay it out of their own pocket, and this can be expensive. We [make] the promise to agents that once a year, when there is a mistake, we will waive the difference and pay it for you. Sometimes they don't know how fares and tariffs work in regions, so this way, they can be assured [that] if something goes wrong, we can help them.