<B>Fare Load Fracas</B>
<I>Buyers Press Airlines To Take On Data Entry Burden</I>
By Jay Campbell
Airlines are moving to take over a role traditionally performed by travel agencies in loading increasingly complex negotiated fares into the GDSs, but some buyers remain frustrated with quibbles among their suppliers as to who is responsible for the work, and at what cost.
Key for buyers is that amid a growing multitude of criteria under which discounts apply, such as fare class, point of sale and even specific flights--not to mention codeshare partners--someone must be responsible for guaranteeing fares to prevent debit memos from piling up. Important to suppliers, however, is that they hold down costs for the time- and labor-intensive process of inputting negotiated data.
Airlines by next year plan to use new fare standards developed by Airline Tariff Publishing Co., the clearinghouse to which carriers file published fares, which will allow them to file fixed contract fares as well as discounts off published rates. ATPCO will charge the airlines only for its costs, said its president Mike Ferrier. He is waiting for some of the GDSs to get their programming in order to accept the data.
In the meantime, however, carriers are loading rates into the GDSs only sporadically, depending on the market, their resources in it and the value of the client. In such an environment, where airlines have anything but a universal policy, buyers are reporting seemingly basic problems with such things as determining who at the airline is responsible for entering the data, if the airline is responsible at all.
The issue becomes more critical with the spread of self-booking tools and the building blocks for direct connections, as GetThere co-founder Dan Whaley pointed out in a recent Op-Ed (BTN, Sept. 18). Travelers cannot expect to quality control their own reservations.
According to a source who recently left a major carrier, the situation is a "humongous mess." He said the carriers were not yet ready to load negotiated fares when Galileo International introduced its Private Fares II product for automating negotiated fares a year ago this week.
Since then, about 60 airlines have filed to PF II, said Galileo vice president of corporate and consumer sales John Hach. PF II, the enhanced product for use with self-booking tools, does not allow agencies to file rates, whereas data for such negotiated fare products as PF I, Sabre's Snap and Worldspan's SecureRate can be loaded by the agencies or the GDSs. For PF II, airlines would prefer to file with ATPCO and some are resisting going directly to the GDS.
Galileo last week met with its corporate advisory board, which heard a presentation by ATPCO's Ferrier. "It's a multifaceted issue that needs to be openly discussed and fully understood by all parties," said Hach. "It's a process of education, evolution and understanding the roles that suppliers play. For many years, travel technology was handled first by the travel agencies, but two catalysts are changing that: the impact of the commission cuts and such opportunities as the ARC-accredited Corporate Travel Departments."
Sabre said it will be ready by January to receive ATPCO's negotiated fare feed. Continental Airlines sales executives said they don't expect all GDSs to get on board until well into 2001.
This summer, Continental began charging buyers $2,000 annually for loading negotiated fares into the GDSs.
"We believe this is an extremely valuable service for a nominal fee," said Dave Hilfman, vice president of multinational sales and revenue programs at Continental. "The $2,000 annually covers the manpower, resources, liability and maintenance if there are changes during the contract period."
Like Continental, other major carriers await the ATPCO option. "We need to look at how to help corporate customers get fixed fares into these systems using ATPCO," said a major airline sales executive who asked to remain unidentified. "We didn't get into it before because if we do it we're liable, but that doesn't hold water anymore." He disagreed, however, with Continental's strategy: "I don't think that cost goes back to the corporate client."
Most airlines were not available for comment last week, but it seems in lieu of the ATPCO system, the equity and/or cultural associations some carriers have with GDSs are distorting what ought to be considered a customer service.
Sabre's Becky Burke, senior product manager for Snap, said, "The airlines have wanted for a long time to have more control over negotiated fares, but because there has been no way to automate the distribution of those fares in a streamlined manner, they haven't been too quick to jump on board."
"We explored using Private Fares II, but haven't found any airlines that were very willing to deal with that," said Doug Baldy, coordinator of corporate travel services at Eastman Kodak in Rochester, New York. "We haven't had to deal with it as much as other folks, since Private Fares I is adequate for our needs."
Moving past an age when individual travel agents referred to a spreadsheet of discounts and then calculated and priced corporate fares, most corporations today have their travel management companies code the discounts into the GDSs' negotiated fare systems.
With the original development of Snap, Sabre also has been manually loading percentages off published fares after receiving a spreadsheet from the airline or agency. The effort typically takes about five days, after which Sabre guarantees fares as long as the template they originally received from the agency or corporation was accurate, Burke said.
Sources called these procedures archaic. One example involved General Electric's Snap implementation with US Airways. A launch customer on Snap, using Sabre BTS, GE reported initial success (BTN, June 22, 1998). But according to a former US Airways distribution manager, "Snap couldn't replicate the different discount levels used on different fare basis codes, generating huge quantities of debit memos, and GE expected us to waive them. Ultimately, all the players ended up eating something well over $100,000."
"Not every air contract can be automated in the GDS," said WorldTravel BTI president Danny Hood, "and all the negotiated fare tools have problems, so we often end up pricing it manually."
Portland, Ore.-based auditor Topaz International has tracked deteriorating agency pricing performance for each of the past six quarters, and the improper application of negotiated discounts is a big part of that, said president Valerie Estep.
"Probably the majority still are using the old fashioned way, in a profile or in a database they can refer to," said Estep. "Some agencies have a proprietary system of their own."
The agencies often make mistakes, said corporate travel manager Cheryl Hutchinson of Fairfax, Va.-based American Management Systems. "Not that the airlines wouldn't make mistakes also, but I wouldn't think they'd charge us later for their error," she added.
Absolving travel agencies of the liability on mistakenly applied discounts is only one reason buyers want the airlines to take over the function.
"The bottom line is that the airlines issue the debit memos, they make up the fares and give the discounts," said one Galileo client who recently had been through the issue. "It seems to me that the airlines ought to be willing to step up to that improvement. Nobody's got the quality control capabilities and it ends up in a debit memo. If you have multiple carriers, it's a hell of a lot of stickies on someone's screen for them to try to calculate fares."
In the airlines' and GDSs' defense, the ex-US Airways manager said, "This is hard stuff to replicate complicated corporate deals in an automated way. I'd have to imagine that nobody is better than ATPCO. You'd have to think it would be easier for the airlines, but the sheer number of deals is a challenge."
Buyers should address the issue during their initial airline negotiations and consider it a factor in vendor selection.
"If we know the carrier is incapable of providing that fare to the corporate customer, we certainly will not be prone to advocate them," said Eric Henderson, Rosenbluth International director of supplier relations for North America. "The answer lies with everyone getting their heads together and resolving it.