<B> Allies On Display</B>
<I>Star First To Link Partners Via The GDS</I>
By David Jonas and Mary Ann McNulty
The news last week that Amadeus, Galileo and Sabre all can now display flight options and connections by airline alliance, as well as by individual carrier, holds considerable promise for the travel industry. Travelers or agents now can quickly view and book connecting flights for Star Alliance partners in Amadeus and Galileo, though they have not yet signed up for Sabre's service. But even more importantly, this seemingly small step in integration highlights how technology can help the partnerships fulfill their real promise to their owners, each other and corporate travelers and travel buyers.
A recent study commissioned by Sabre on travel agents' knowledge of alliances drives home the importance of the new displays. Of the Sabre agencies surveyed earlier this year, 66 percent said the display will improve customer satisfaction and 35 percent said it will save them six to 30 minutes per week. Even more startling, while 85 percent of agencies were familiar with airline alliances, few could identify them or name more than one member carrier. Forty percent identified the Northwest/KLM alliance and 20 percent identified the Star Alliance, but less than 10 percent could name the Atlantic Excellence or Oneworld alliances.
The four main airline alliances are: the Atlantic Excellence partners, Delta, Swissair, Sabena and Austrian; Oneworld, including American, British Airways, Canadian, Cathay Pacific, Finnair, Iberia, LanChile and Qantas; the Star Alliance, which includes United, Lufthansa, SAS, Air Canada, Thai, Varig, Air New Zealand and Ansett Australia; and the Wings Group, Northwest, KLM, Alitalia and Continental.
Moving To A Single Host
For the alliances, having a single display in the CRS is just the first step in integration. What may soon lie ahead, industry insiders said, is for all alliance partners to shift to a common GDS host reservation system. And technology vendors are lining up.
United reportedly is exploring the benefits of a common technology in a bid currently on the street.
Consultant Richard Eastman, president of the Eastman Group, called the idea of changing hosts short-sighted. Instead, he believes United and the Star Alliance should focus on integrating existing or new systems. Other technology suppliers appear to agree.
Sabre's Ninan Chacko, senior vice president of information technology services, said "from a technical standpoint, we could put an alliance together on a common system in 18 to 24 months. But it will take any one faction of alliances three-and-a-half to four years before they agree on common funding issues and come up on one system." Instead, Sabre is focusing on ways to integrate existing applications, and creating or acquiring whatever additional modules it might need. "Within the next six to 12 months," she said, "we'll have all the pieces needed to make the passenger alliance work seamlessly."
"The challenge is not the technology," said Bobby Grisham, president of the transportation industry group for EDS of Plano, Texas, "but the business process that it drives. You want to minimize the changes for checkin agents."
IBM, too, expects much of its alliance business to be from integrating existing systems, rather than creating new ones.
In her 15 years in the business, said Lisa Walsh, worldwide marketing manager for IBM's air transport segment, "I've never seen so much focus that hasn't really produced anything from a spending or development perspective. The potential business impact is huge. We want to be there."
As with many of its airline IT suppliers, IBM has developed a comprehensive alliance strategy to complement its sales efforts to airlines. It has named one management executive to focus on each of the alliances, in addition to the sales reps calling on each of the partner airlines, said Claude Guay, global marketing executive for IBM's travel and transportation unit.
As these alliances have been forged over the past two years, the CIOs of the member carriers met in a flurry of strategic and tactical meetings. Initially, the focus was on identifying which systems needed to be integrated and deciding how to fund the effort.
"If someone has an itinerary with segments on multiple alliance airlines, that information is passed across the system. And of course complexities came about when taking codesharing into consideration," said Brian Wilson, British Airways director of information management in London.
One example of the discontinuity of alliances is that travelers must check in with the operating carrier of the flight and not necessarily the one that sold them their ticket. Though the airlines have sent out notices to agents reminding them to inform travelers, the process is certainly a seam in the system.
"We wanted to establish through- checkin with Oneworld," Wilson said. "After developing quite a list of challenging products, we connected coordinators with each airline." This month, the CIOs of all Oneworld partners met in London to review initiatives, he added.
Keith Rogers, director of sales development for Delta Air Lines, part of the Atlantic Excellence and a new Air France partner, said technology teams from both the U.S. and France already are working together to link baggage systems, PNRs and customer databases and to develop interlined electronic ticketing. "The area of focus is customer recognition, the ability of both airlines to recognize priority customers and serve them appropriately," he said. "Now that the Y2K project is behind us, we can use those resources to build integrated customer service enhancements."
The Star Alliance also targeted many of these same areas last fall as it outsourced development of Starnet, an integrated communications network to link six major airlines, to Unisys Corp., Blue Bell, Pa. Some benefits are apparent--such as the ability for the Star Alliance to identify premium frequent flyer members across the network--but other development continues.
"We took a clearinghouse brokerage approach with integrating our frequent flyer program in order to recognize premium passengers. A new initiative is the interchange of real-time operating information of flights. This allows us to handle connections following delays and reaccommodate passengers," said Bruce Parker, United's CIO and chair of the Star Alliance Information Technology Board, a strategic development group comprised of partner carrier CIOs.
While carriers also would like to offer corporate accounts a more consolidated view of reporting, some fear antitrust laws prevent them from doing so.
"We have done some work in countries where there are no member airlines and we are allowed to pull the information together in a single sales transaction," BA's Wilson said. "For example, there are field tests running in Denmark where we're demonstrating how we've joined our systems. Customers there are already seeing that. But we can't do it in the U.S. and the U.K. because of antitrust rules."
However, United's Parker recognizes the concerns. "You'll see more cooperation on corporate reporting in areas not restricted by antitrust regulations. We would like to provide a closer relationship with corporations even if we need to deal with them separately. Though we can't yet comingle data, we can still share tools."
Sharing The Data
At the GDS level, Galileo, like IBM, has realigned its account management, naming a senior manager as point person for each alliance. A good part of the responsibility is trying to discern exactly what the alliances want, so Galileo can begin developing products, said Andrew Winterton, vice president of airline vendor account management for Galileo U.K.
Worldspan is developing an alliance architecture that will allow airlines to share frequent flyer data, PNRs, ticketing and other information, said Barbara Hughes, vice president of product development. "We view technology as the glue that can hold alliances together and we believe we're further along than anyone else on this," said Sue Powers, vice president of sales and marketing. Worldspan is determined to garner the business of at least one alliance partnership by year-end, Powers said. Worldspan already hosts TWA and Northwest, as well as 17 other regional carriers.
"Given that there are four alliances, we expect to be involved in at least two," said Sabre's Chacko.
Amadeus also is aiming to capture the business of at least two alliances, according to Hans Jorgensen, senior vice president for the Madrid-based GDS. Projecting business the behemoth alliances could generate, Jorgensen said that one of the biggest could generate 120 million bookings a year. Even at 50 cents a booking for the other 60 million, that's $30 million a year--"enough for us to want to get further into it."
Competitors also predict that travelers and travel managers will begin to see some significant customer service enhancements emerge from the airlines over the next six to 12 months.