As low-cost carriers continue to grow rapidly and grab corporate marketshare from legacy airlines, distribution channels are scrambling to sign them up. Several industry executives speaking this month at the National Business Travel Association conference said global distribution systems, now operating in a free market
(see story), would alter their pricing to secure LCC participation. At the same time, the LCCs are building online corporate and agency portals and other direct connections, including a new partnership between AirTran Airways and corporate booking system provider Outtask.
"Something has got to give," said Robin Schleien, Carlson Wagonlit Travel president in North America. "The GDSs have to find a way to bring low-cost carriers into their systems. The economics would be different, which would change agency economics and corporate program economics."
Worldspan vice president Cheryl Weldon agreed. "We are offering LCCs a chance for distribution outside of their normal sales focus," she said. "The economics definitely will be different."
Though the LCCs conceptually welcome the opportunity for wider distribution at lower cost, some are not eager to place their products in GDSs. "It is unlikely we would copy what legacy carriers have done from a distribution standpoint because it makes no sense," said Amy Curtis-McIntyre, vice president of sales and marketing at JetBlue Airways. "Seventy-eight percent of our bookings already come through jetblue.com."
Instead, LCCs are developing GDS bypasses. One of the newest, between AirTran and Outtask, by September is expected to directly connect users of the Cliqbook self-booking tool with the carrier's Navitaire reservations system.
Cliqbook users will have full access to AirTran's fares, "including special pricing that may not be available in the GDSs," as well as last seat availability, advance seat assignments, business class upgrades and other perks associated with the carrier's corporate program.
"Today, I am in all four GDSs, and it is very costly," said AirTran director of sales Bill Howard, noting that one-quarter of all AirTran bookings go through the GDS channel. "This is our first direct connect."
Outtask previously announced a partnership with JetBlue that provides Cliqbook users with links into the airline's CompanyBlue booking Internet portal.
Frontier Airlines' strategy is to blend an existing GDS with direct connect technology. Early next year, the carrier will activate "an all-inclusive hosting solution" from Sabre, which will include a res system and products from the Sabre Airline Solutions group. "Once we go over to Sabre, there will come a myriad of tools that we can't wait to unleash on the corporate community," said Lowell Miller, Frontier Airlines director of sales and distribution. "It will put to rest all the talk about differences between being connected to a GDS and being connected directly to an airline."
Frontier currently lists in all four primary GDSs, including Galileo, which powers the Travelport corporate booking system. Frontier and Travelport this month announced an agreement to provide Travelport clients with discounts on Frontier fares, following a similar agreement between the airline and Travelocity Business. "We will remain in all GDSs until they create new models," Miller said. "For now, the plan is to keep our distribution diverse because we are in a volatile environment in which drastic decisions could have monumental impact."