As the world's airlines gravitate toward a few major alliance groupings and some of the largest global distribution systems begin testing open architecture core reservations systems, there is an opportunity for airline partners to link certain systems and facilitate alliance activity.
Amadeus has progressed the farthest of any GDS in providing integrated solutions for alliance partners. The Oneworld alliance's American Airlines and Finnair already began electronic ticket interlining as several members of Oneworld prepare to test Amadeus' new departure control and inventory management modules.
Once achieved, aligning on a common platform for core reservations and other functions will smooth alliance integration and also lead to passenger benefits, such as seamless electronic ticket interlining. But the initial migration to newer systems is neither easy nor cheap, especially when most of the world's carriers are mired in a financial crisis. The fluid nature of alliances—highlighted again in recent months by proposals for mega alliances
(see story)—further hinders IT integration efforts.
"Successful alliances are not just about things you can see," said Fred Reid, Delta Air Lines president and COO, last month at a SkyTeam event in Atlanta. "Equally important are the things you cannot see."
Though Reid said SkyTeam's technology integration is "improving rapidly," Delta's core reservations are on the Worldspan global distribution system, while its European counterpart Air France is not; neither is any other SkyTeam member.
However, being hosted on the same res system is not a prerequisite for a functioning alliance, evidenced by the Continental-Northwest airlines domestic partnership. Continental's internal reservations system is on the EDS platform, while Northwest's uses Worldspan, a company in which it, like Delta, holds an equity stake. Indeed, technology integration within an alliance need not focus solely on core systems. It also can include e-ticket interlining, airport kiosks, joint customer relationship management initiatives, passenger processing and other traveler services and internal functions. In fact, Star Alliance, which has the most members of any grouping and affiliations with several distribution platforms, created Star.Net, its own IT network linking systems of all member airlines. The network enables member airlines to communicate more easily across differing platforms.
Star's latest technological advancement, achieved this summer, centered on the new Star Alliance Awards loyalty program. Aside from the frequent flyer benefits, which allow passengers to use more than two carriers on award redemption tickets, the program includes real-time booking of multi-carrier reward tickets. Dubbed Redemption Availability and Sell, the function speeds such bookings by linking computer systems.
"Booking an award ticket on another airline used to be very time consuming, including the time needed to call customers back and rebook them when space could not be confirmed," said Denise Martineau, the alliance's loyalty director. "Feedback on this new technology enhancement indicates that it is already improving service by shortening award booking call lengths, reducing customer callbacks and improving productivity."
Meanwhile, the Oneworld alliance, seen as the least integrated in some respects due to a general lack of antitrust immunity, has several members on the common Amadeus platform, including four of the five European members—notably alliance co-anchor British Airways. American Airlines, however, the Oneworld keystone in the western hemisphere, is embedded firmly with Sabre.
Amadeus also hosts some Star Alliance carriers as well as the European members of SkyTeam, and insists its new-generation technology is the trail alliance partners jointly must blaze to achieve the efficiencies they have promised.
"Sooner or later, it will dawn on the other GDSs that moving to open architecture gives cost and time advantages," said Hans Jorgensen, Amadeus worldwide vice president of the airline business group.
The open architecture supplements or replaces legacy transaction processing facility systems developed on mainframes more than a generation ago. It is based on more flexible Unix platforms and, once fully implemented, will enable airline users to migrate from fixed to variable costs. Amadeus said it is "largely there" with the global core reservations system and is preparing to test inventory management and departure control modules with Oneworld partners British Airways, Finnair and Qantas.
"We expect to fully implement with them by the end of next year with airport checkin to follow a year later," Jorgensen said, noting discussions are underway with other carriers.
BA's move in February away from its 30-year-old British Airways Booking System to Amadeus solidified the GDS as Oneworld's choice, even without AA's participation. BA also turned to Amadeus for other functions, including fare quoting, formerly handled by Galileo.
More recently, BA in August cut over to the Amadeus electronic ticket server. BA said the move will slash 80 percent of its e-ticket system maintenance costs and, by using a central application and database, facilitate e-ticket interlining with other airlines, notably partners Finnair and LanChile, which already use the Amadeus e-ticket server. Qantas is scheduled to move to the system later this fall.
"Any ticket that American issues and is flown on Finnair would be passed over to Amadeus," despite their use of different systems, according to Jorgensen. The U.S. Department of Transportation this summer granted antitrust immunity to American and Finnair.
Meanwhile, Star Alliance, with some members already on the Amadeus platform, soon may further its relationship with the GDS. "Some of the stronger members will make a decision this autumn to move to a common platform," Jorgensen said. "I am not suggesting United will follow, but as alliances are looking for single solutions, we probably need to work out something with them this autumn."
United continues to use the Apollo res system, which it activated in 1971.
Amadeus is not the only GDS looking at this type of integration, but Jorgensen said he was surprised no one else has yet developed a new-generation system. "EDS/Sabre has been promising, but they have not announced any launch customers," he said. EDS in March 2001 purchased Sabre's infrastructure outsourcing business.
"We'll be very committed to move to this next-gen model," responded Mike Hulley, EDS' new president of the global travel industry group and an IBM veteran. "But some of the airlines have been hard hit and are not spending."
Nevertheless, Hulley said alliances, in general, have progressed at least in mindset, and are ready to latch together their systems. "For many years, the alliances were virtually no more than a brand or marketing experiment," he said. "What has happened, and a lot of people are ecstatic, is that they are able to trust each other more. From an IT perspective, it can greatly cut costs."
Though more than 60 airlines are on the Sabre res platform, only one, American, is a member of a major alliance. But Sabre executives are not convinced the time is right for a move from mainframe-based res systems. "Everybody hates TPF and mainframe—mostly the technologists—but it's reliable, with 99.9 percent uptime," said Gianni Marostita, Sabre president of reservations business. "That's why TPF is still important and part of the core activity."
Marostita added that interesting developments moving forward will involve "modularizing" pieces of the overall process, including decision support, customer relationship management and other planning functions.
~Additional reporting by Jay Campbell