Customer-Specific CRS Rates Near

<B> Customer-Specific CRS Rates Near</B>

By Mary Ann McNulty

Galileo International and Sabre each expect to launch new products by early next year that will enable airlines to identify individual travelers and customize the availability and fare information the computer reservation system offers them in a nanosecond.

Participating airlines will receive a traveler's frequent flyer and corporate identification number with every request for information and then match the numbers to those in their databases.

If a top-tier frequent flyer asks to buy a first class seat, for example, the airline could show availability to that traveler, while showing everyone else that first class is sold out. Presumably, the airline also could show its lowest fares only to specific customers, or travelers from specific companies.

In a new suite of airline offerings, called 1-2-1, Galileo said it intends to debut the first such product by the first quarter of 1999. This product would transfer a traveler's frequent flyer number for each airline when the travel agent or traveler asks for an availability display.

Sabre intends to announce its product early next month, when it will release dates, pricing and other details, said Jim Pogue, senior vice president of customer marketing.

"I'm firmly in the camp that says this is the right direction. It spells out a new dimension between airlines, corporations and travelers," Pogue said. "The ability to be able to treat your best customers, your most frequent travelers, differently is good. The interest of the airlines is being able to look at their highest-value customers in greater and greater depth and meet their needs."

Sabre developed its first one-to-one marketing application earlier this year for the redesigned American Airlines Website, where users get customized responses based on their frequent flyer numbers.

"What's really important is being able to deliver that whole mix in two to three seconds," Pogue noted. "That requires a very tight integration with the revenue management systems and a very advanced decision support--two areas in which Sabre excels. It's not a trivial thing."

Galileo said that the product came about as the result of "listening to agencies and frequent travelers--a lot of corporate travelers--complain that they feel they're not treated special until they board the airplane."

The next step for these best customers in terms of marketing "is bringing it down to a much more personalized level, trying to target the marketing between the airline, agency and ultimate travelers. We identified this as an area where we could help them provide better service," said Michael Cavanaugh, new director of marketing for Galileo's global vendor marketing organization, including corporate products.

Today, global distribution systems send only an agency identifier and pseudo-city code to the airlines on all availability requests, Cavanaugh said. While a corporation could use a pseudo-city code to identify itself to the airline and presumably get better availability displays, few companies actually do so. In reality, most airlines display their entire inventory to anyone who asks for it.

In fact, the airlines through the Air Transport Association's Electronic Marketplace Committee asked all the global distribution systems to provide the frequent flyer numbers, both for security and marketing reasons, said Steve Cossette, senior director of distribution planning for Continental Airlines and the former committee chair. They also asked the distribution systems to garner next of kin and contact information in every booking record, to comply with Department of Transportation requests.

"The real question is, how will they provide us this additional information and do they intend to charge for it?," Cossette said. "But we're really not interested in the marketing piece of it."

While Galileo will pass through frequent flyer and corporate ID numbers to participating airlines, it's up to the carriers to program their systems to recognize and respond to the numbers, Cavanaugh noted. Only the frequent flyer numbers for its own customers will be sent to each airline.

"There's good benefit to the airline and subscriber," Cavanaugh said. "But the traveler is really the one who stands to win. A frequent traveler today isn't particularly recognized until long after a booking is made. This gives airlines more opportunity to offer such things as upgrades, additional frequent flyer miles or special deals. The opportunities for the airline are almost unlimited."

Travelers who prefer not to be recognized can decline to have their frequent traveler numbers sent, he added.

Besides altering fare and availability displays, the technology also could be used to suggest alternate routings, or special deals from alliance partners or hotel companies, said Galileo spokesperson Julie Shepherd.

While Cavanaugh said the airlines have been "dying to know" when such a system would be available, BTN was unable to reach any airline executives with knowledge about the plans or the benefits of one-to-one marketing by press time. Galileo has been talking to airlines for about a year.

Consultant Richard Eastman of Santa Ana, Calif., definitely sees a need for one-to-one marketing, but noted that "the viability of such a product depends entirely on what Galileo charges for it. It also depends on the protocol platform: if it runs only on mainframe six-bit environments, the bulk of the airlines are probably going to reject it, because it locks them into a costly architecture that most are desperately trying to get out of."

San Francisco-based consultant Bill McFarlane, one-time head of Galileo's North American marketing, said, "This is part of a widening view, where Galileo sees itself as more of an information services company than just a distribution company. But I am somewhat skeptical. There is the propensity to be overwhelmed by information."

Nonetheless, McFarlane said, the global distribution systems have to continue to grow the business they have and devise some new and creative means to do so.

"Galileo just isn't very good at showing it can develop leading edge technology," he added.