Carriers Cut Auto Book Deals

<I>New York</I> - American Airlines and United Airlines reportedly are offering broad discounts to travel managers who beta test their online corporate booking systems.

The buzz on the show floor at this month's Corporate Travel World was that the carriers are offering across-the-board discounts of 2 to 4 percent. Those discounts apply to a corporation's total air volume, they said; additional bonuses for bookings actually made using the system also are being offered.

But even as these airlines are upping the ante on the booking side, they also are looking at cutting costs on the commission side. Continental this month joined Northwest in capping agency commissions (BTN, March 3), and insiders say others are considering a similar change.

At Sabre, BTS director Arlene Vance declined comment on discounts being offered by American Airlines to BTS customers. "Although American is certainly a strong supporter and marketing partner of ours, relationships between them and their corporate clients are privileged, and it is against CRS industry regulations for us to be a party to them," she said.

While American Airlines no longer owns Sabre, both are owned by AMR Corp.

Vance added that "it is up to American on an individual basis to offer discounts to its clients for signing up with BTS," and that discounts "probably vary across the board."

Tony Molinaro, a spokesman for United, said only that it is "probably true about the discounts."

At Northwest Airlines, the first carrier to announce an online commission cap (BTN, July 29, 1996), managing director of distribution planning Al Lenza noted that while Northwest expects to market the Worldspan/E-Travel system for corporate customers, "we're not as wedded to a single product as American and United. We know that American Express will have a product and Carlson will have a product and Andersen Consulting will have a product, and that corporate customers will drive the decision of which solution to use."

Still, he acknowledged that "internal discussions about the possibility of tying in a discount" are under way, "but we haven't made a decision on what kind of incentive we will offer, or even whether to offer an incentive at all."

Lenza said that Northwest stands by its decision to offer agents lower commissions for reservations booked by travelers, and that the pricing model it brought to the industry will hold--at least for the near future.

"We've been out there alone for eight or nine months, and we still think it's the right decision in this new environment," he said. "That may change, but for now, we think automated systems take much of the work out of the process, and we'd like our share of the savings."

When asked precisely how much Northwest has saved through the commission cap, Lenza quipped, "50 percent." He acknowledged that the carrier "has taken a lot of arrows for a small amount of savings," but noted that while online bookings still amount to less than 1 percent of all tickets, "volume is building at 20 to 30 percent a month."

USAirways spokesman David Castelveter declined comment on the state of discussions over incentives and/or caps in the online market. But he noted that USAirways' corporate product, Corporate Travel Works, is still in testing with only one customer, Nationwide Insurance, although Andersen Consulting's Via World Network is now "moving into pilot."

Delta spokeswoman Jackie Pate also declined comment on either issue, but said the airline will roll out an automated booking system of its own--and not the Worldspan system--this summer.