<FONT SIZE="+3"><B>ATA To Set Online Rules</B>
<i>Could Prod Some To Shun Electronic Booking</I>
By Jay Campbell
The Air Transport Association's Electronic Marketplace Committee this week will issue recommended practices for airlines to guard against online overbooking by travelers.
ATA's measures, like those already put into place by Northwest and other airlines, could have far-reaching effects on both the general desirability of electronic booking and on competition among online providers in the corporate market.
Such controls include placing time limits on reservations, limiting the number of online systems allowed to display certain airlines and capping the number of reservations allowed for each credit card.
These measures are of utmost importance for the airlines because without them, it's easy to tie up an airline's inventory by making up to hundreds of bogus bookings. But the restrictions will force some potential online bookers to book elsewhere to retain the flexibility allowed by unrestricted fares.
"A lot of our travelers like to make a couple of reservations and then ticket them at the last minute depending on changing business needs," said Becky McCoy, travel manager for The Limited. "I would think that if they can't do that online, it will impede some travelers from booking that way."
Steve Cossette, senior director of distribution planning for Continental Airlines and chair of the ATA committee, said the problem is easily solved: "The risk of inventory abuse is far greater than the risk of lost revenues from people not booking online." John Samuel, managing director of distribution for American Airlines, agreed that such controls make online reservations more restrictive. "That's why we're loathe to do it," he said.
To address the problem, carriers will develop point-of-sale identification systems to identify top customers and allow them as much flexibility as possible. Such a system would allow them to determine who is making a booking, opening the door to many possibilities in terms of incentivizing corporate customers to use certain systems.
"We could take different approaches for different customers," said Shafiq Kahn, senior director of distribution planning for USAir. "For a given point of sale, maybe we'll decide to show every available seat, or we might allow a customer to elude certain rules."
In addition, to help address the problem of serious abusers, ATA is preparing to work with the Airlines Reporting Corp. to develop an accreditation system for online reservations providers. The certification would be based on standards for encryption levels and firewalls. Cossette said the effort will help build consumer confidence in the channel.
Because they control the flexibility and availability of seats, airlines could in the end have the upper hand in terms of competition among corporate booking systems. "When the airlines start charging corporations for their booking products after the beta tests are over, if they are able to relax the restrictions on some tickets and the agency or third-party people cannot, that's a key competitive advantage," said Pam Boies, travel coordinator for Duke Power in Charlotte, N.C.
But for now, "we cannot identify all of the corporate accounts, so the rules apply to them as well," said Al Lenza, Northwest's vice president of market distribution. "As it evolves, there will be different controls and unique identifiers for the corporate market."
Northwest requires instant ticketing for an online booking made within three days of travel; before three days, Northwest requires ticketing within 24 hours of reservation. The airline said that these controls, which took effect Oct. 1 (<I>BTN</I>, July 29), have reduced its online no-show rate and its CRS fees by 35 percent. Northwest also requires credit card validation for a reservation.
Other airlines already have implemented rules for online reservations. Southwest, the first large U.S. carrier to offer Website booking, and Delta, the most recent, both require that any reservation made via those channels be purchased right away.
Kahn said USAir has sent letters to the four major CRSs, asking them to disclose which online systems are accessing USAir inventory. "CRSs have been very cavalier in terms of how they've opened up our inventory to the market without asking us," Kahn said. "When Easy Sabre first came out a number of years ago, we didn't really look at it. But now, with Travelocity, Expedia, United Connection, PC Travel and others, we are much more exposed."
Lenza already has the ability to shut down an online system's access to Northwest inventory if abuse is prevalent-which he has done twice to "smaller providers," although he would not say which ones.