In an apparent about-face, Delta Air Lines last month announced a new relationship with The Prism Group that will provide the carrier a range of data services meant to improve corporate contract processes and decision making. Delta's Corporate Data Solutions, which will be implemented early next year and mirrors Prism-enabled systems already in place at Continental, Northwest and United airlines, raises familiar concerns for some corporate travel managers. Meanwhile, as the industry continues to grapple with the whos, whats and whys of data masking, developed to protect sensitive corporate information, more than 3,200 airline corporate accounts are transmitting requested data to Prism for processing.
Though Delta said its tough stance on data confidentiality has not changed, clients will be asked to sign a new three-way confidentiality agreement that includes Prism and "supercedes the third-party reporting restriction in their existing Delta agreement"
(BTN, Feb. 26, 2001).Clarifying its position, Delta said: "This is not a reversal of our position but simply recognizes that the introduction of Prism's airline data transfer protocol changed its product to the point that our original concerns now have been satisfied."
Safeguards, including data masking
(BTN, Oct. 14), generally have placated those travel managers willing to speak publicly on the issue. Yet, one buyer said Delta "caved" by requiring data transfer to Prism after the airline denounced competitors for mandating the same process. "The lingering question is whether it is in violation of airline agreement confidentiality clauses to supply all of this detailed information to Prism," said the travel manager, who like other concerned buyers, preferred anonymity to protect supplier relationships.
With Prism now in place at four of the Big Six U.S. carriers, as well as in more limited use at British Airways and early testing at KLM Royal Dutch Airlines, some buyers suggested antitrust implications. The National Business Travel Association nearly two years ago requested the U.S. Department of Justice's antitrust division initiate an investigation. That request was not fulfilled at the time and NBTA president Kevin Iwamoto said the association recently was advised by DOJ that "there was no evidence of inappropriate actions by any of the airlines," because each unilaterally selected the Prism system.
The issue for some travel managers is not how data is handled nor which particular third-party system the carriers have selected. Instead, persistent objections relate to certain requested data elements they said either are irrelevant for marketshare-based airline agreements or too sensitive to be dumped into an automated system to be consolidated by a sole third-party for most of the industry's dominant players.
Moreover, since Prism provides what Delta executives described as an "end-to-end" system, including contract term generation, some corporate travel buyers are concerned that providing data on all airline agreements—even in aggregate—further limits their negotiating foothold.
"Clients know the airlines need this for marketshare data, but they do not want to give certain data that lessen purchasing leverage," said Danny Hood, president of WorldTravel BTI, specifically citing a data field that lists flight numbers.
"Recently, airlines are requiring that field not be masked," added Dee Runyan, WorldTravel BTI executive vice president. "Some customers vehemently disagree and are looking to carriers that do not require it."
Dave Hilfman, Continental vice president of multinational sales and revenue programs, said a properly functioning Prism system requires certain fields to be unmasked. "The flight number helps identify alliance partners, assists in cabin mapping and ensures proper origination and destination reporting," he said. "It is a critical element, but it only goes to Prism. We don't see it."
"It is not an issue of safe harbor or Prism per se, but of sharing information that has no bearing on the deal itself," said another travel manager, who thus far has refused to pass data to Prism for any airline agreements, citing revenue data.
Eric Henderson, Rosenbluth International director of North American supplier relations, suggested carriers use revenue data as a secondary measurement. "It gives them assurances they are not being cherry-picked for low-yield stuff," he said.
"Data is not just used for measuring share," added Prism president Michael Whitesage. "Airlines need to qualify someone to see if they are suited for a program, forecast financial performance, monitor contract performance and settle the contract. For that, all sorts of data are needed."
Buyer concerns on masking flight numbers and revenue figures speak to a wider data masking controversy on the minds of a handful of travel managers: Should masking occur before travel management companies hand off the data feed or after it arrives at Prism?
Officials at Continental, Delta and United each said masking data beforehand is redundant in light of Prism's capabilities. "We are starting to see a proliferation of different masking routines that are not beneficial to anyone and cause problems for Prism," Hilfman said.
Nevertheless, some corporate travel managers prefer some level of masking beforehand. "We have had heated discussions with the airlines," said Matt Beatty, vice president of industry relations at Carlson Wagonlit Travel. "We are standing by our customers and have almost had to serve as marriage counselors." CWT, along with other travel management companies, indicated masking and data transfer costs are not separate charges incurred by corporate clients, but are included in overall MIS fees or, in some cases, covered by the airline.
"There is no additional fee for masking out data elements, but there are maintenance costs associated with customized data feeds, which is what the airlines' Prism process requires," said Pam Arway, American Express executive vice president and general manager of corporate travel North America. "In the case of airlines that require their clients to hand over a customized feed for Prism, many clients ask the airline to pay the fee, since the data requirements are dictated by the airline."
Amex officials later noted that most clients have succeeded in convincing their airline partners to take on the cost. Continental, for one, "ensures agency costs strictly associated with the data transfer are offset," according to Hilfman.
"Delta and the other airlines are not willing to pay the fee for the feed to be provided to Prism, but insist that Prism be used," said a buyer at a multinational firm. "That hardly seems right."
United said it "has not paid anybody" to handle the data feed. "That is part of the commercial relationship between agencies and their corporate clients," said Chris King, United manager of system development and business management.
Meanwhile, Delta said such standard data exports as those recommended earlier this year by the Data Advisory Board
(BTN, June 24), would not apply because it, for example, constructs O&Ds based on business rules that may be different than other carriers. "We prefer not to limit our flexibility by locking into standardized interpretations of connections, stopovers, etc.," the carrier stated.
Without describing the program as mandatory, Scott Slater, Delta general manager of corporate programs, said, "If accounts refuse to participate, it will have an impact on their Delta agreements." Like its peers, Delta is becoming more selective on which corporate agreements should be maintained, as automation and data analysis enable easier account performance reviews. "In the future, deals that are not performing won't last too long," said Lee Macenczak, Delta senior vice president of sales and distribution. "Corporations will still demand consideration for their volume so we have to be productive in tracking it."
Meanwhile, Prism asserts that this method of contracting allows carriers to reach smaller customers that previously either were not recognized or ineligible for corporate discounts, therefore introducing travel management concepts and procedures to a wider base of companies. That has not yet occurred at United, which announced its Corporate Solutions program in March, began implementations in May and thus far has reached agreements—including the Prism element—with about half of its existing clients. "Corporate Solutions/Prism is a good prospecting tool, but the process now is to run through the current account base and differentiate between good and bad deals," King said. In the next phase, United will reach into lower tiers to uncover new contracting opportunities.
Delta explored several potential solutions, including systems furnished by Airlines Reporting Corp., Eclipse Advisors, Hi-Mark Software and TRX Data Services, as well as an internally developed system, before choosing Prism to back Corporate Data Solutions. Macenczak noted Prism usage by Continental and Northwest—Delta's would-be alliance partners—did not influence the decision, but said, "Having them on there is an added benefit."
Initial testing with select Delta accounts is expected to begin next quarter, followed by wider implementation throughout the United States and Canada during 2003. The carrier said monthly Web-based reporting, showing "a true view of the cost savings realized through their contracted discount," will be robust, but at launch won't include actual flown data.
Continental's reporting capabilities, used by almost half of the carrier's client base, also cannot yet provide flown data, though the carrier expects to have "a positive announcement" sometime next year.