Cendant Travel Distribution Services this week inked a deal with Alitalia to provide point-of-sale discounts to corporate clients using either the Travelport or Orbitz For Business travel management platforms, following a similar back-end rebate arrangement announced last month with Singapore Airlines. Frontier Airlines last summer was the first airline to strike such a deal with Travelport
(BTN, Aug. 16, 2004) and has since tripled its market share among the system's users, according to Brian Murphy, director of supplier relations for Cendant Travel Distribution Services.
Murphy said new airline, car rental and hotel supplier deals are in the works, including a hotel consortia deal expected in about one month. "It is a competitive differentiator for us," he said of the whole set of preferred supplier arrangements. "The mega travel management companies certainly have their own savings programs."
On the air side, Murphy said the rebates clients receive from booking Singapore Airlines "are similar to traditional revenue shares, but it is a deeper rebate than you would get from commissions or overrides." The point-of-sale discounts afforded by Alitalia and Frontier are "similar to what a medium-size business might negotiate on its own." In all cases, airline deals include discounts on all classes of service, though Murphy declined to offer specifics. He also said the deals are "airline to agency agreements" not necessarily tied to global distribution system pricing, although the special fares generally are processed through Cendant's Galileo GDS.
"Even though we are a GDS, we want to bring in content that goes beyond what our competitors are offering in the marketplace," Murphy explained. "It is a sign from the airlines that they are recognizing online agencies as the future of corporate travel."
The preferential agreements with Singapore and Frontier cover only Travelport customers since they were negotiated prior to Cendant's integration of Orbitz for Business, following the announced acquisition last October
(BTN, Oct. 4, 2004). Alitalia is the first airline to deal jointly with Travelport and Orbitz For Business and the specialized pricing should be available soon in both systems. Moving forward, corporate clients on both platforms would access most new discounts negotiated with suppliers.
Sabre's Travelocity Business last year announced deals with several airline, hotel and car rental suppliers that provide corporate users with discounted pricing
(BTN, Aug. 30, 2004). Expedia Corporate Travel also said it offers "business-friendly rates" and last year announced a series of agreements with hotel chains.
None of the top three online-originating agencies has announced a preferential deal with a major U.S. carrier for corporate travel buyers. "For the foreseeable future, it will just be niche carriers," Murphy predicted. "There is currently very little desire among network carriers to operate under these types of deals."