<B> InsideTrack</B>
<B>Alitalia, KLM To Merge</B>
The boards of Alitalia and KLM last week agreed to terms that will effectively merge the two carriers' operations and revenues into the largest passenger airline in Europe. The plan, which will kick in on Nov. 1 if approved by government regulators, includes full integration of global networks, joint fleet decisions, 50:50 profit sharing, combined sales and marketing and unified revenue management. KLM also agreed to contribute (euro)100 million to Alitalia's ongoing hub development plans at Milan Malpensa.
<A NAME="2"><B>Cross-Border Ticketing Clarified</B>
Addressing a major objection from travel managers to European cross-border satellite ticket printers (EuSTPs), the International Air Transport Association now allows travelers to use EuSTP tickets to fly from an airport in a neighboring country to where the ticket is printed. EuSTPs let corporate clients' overseas branch office purchase flights from an agency in the same country as its head office but have the ticket printed remotely on its premises. Travel managers were unhappy that EuSTPs only could print tickets for travel from airports in the same country as the printer. A client now can purchase tickets departing from a neighboring country if it is the nearest to the client's office. The amendment delighted Belgium-based InterIKEA, which has an office in Sweden, where the nearest airport happens to be Copenhagen. "This is going to save us a lot of money. Copenhagen is much more convenient for our Swedish office," said travel services manager Yves Galimidi.
<A NAME="3"><B>Marriott Joins Folio Data Fold</B>
Marriott next month will become the second hotelier to use DB Technology Inc.'s DB RAS system to electronically download full hotel folio data to IBM, the nation's largest travel buyer. IBM already gets nightly folio downloads directly into its increasingly paperless expense reporting system from preferred Crowne Plaza properties through the DB system (<I>BTN,</I> Oct. 12, 1998). Marriott will pilot the system at two properties, one near IBM headquarters in New York's Westchester County and one in Manhattan. "Right this minute it's an IBM thing; we want to test with them and see how it works," said Patricia Welch, director of information resources for Marriott's northeast region. Then, the system will roll out "at least North America-wide. If other corporate customers are interested in getting folio data, we certainly want to talk to them."
<A NAME="4"><B>Hotels Mull Commission Cuts</B>
The hotel industry is considering cutting commissions to travel agencies--though no one in the sector most dependent on agencies is yet willing to be the first to take the leap. Still, acknowledged one major chain executive, "We've had hours of meetings on the subject." Said Hyatt vice president of electronic distribution and marketing Joan Lowell, "I can't imagine us taking a lead position on that." Cornered at NBTA, Marriott International's senior vice president of sales Richard Hanks said, "Where other industries are getting disintermediated, the hotel industry is getting more and more intermediated. It would be wise for the industry to reevaluate commissions based on the amount of work involved. Marriott is evaluating that. We started paying commissions on the leisure side, and now we pay 10 percent for everything."
<A NAME="5"><B>Sabre Sets E-Tix Default</B>
When e-ticketing becomes the default ticketing method for Sabre on Sept. 1, it will become one of the last GDSs to do so. More than 50 percent of Sabre travel agencies already have switched the default to e-ticketing, a trend Sabre had not seen when it first considered the default change.
<A NAME="6"><B>Courtship Ends, GDSs Move On</B>
Amadeus and Worldspan executives are busy plotting their new, separate futures as the two-year courtship ended without a marriage at the self-imposed deadline of June 30. Amadeus insiders said the Worldspan board just couldn't agree to one issue. However, Worldspan executives said a host of unresolved issues that led to the breakup. Separately, Amadeus lawyers asked the U.S. Department of Transportation to prohibit the tying of corporate airfare discounts to the use of a specific global distribution system. Amadeus asked DOT to act now by simply interpreting existing rules. Continental, which owns 12.4 percent of Amadeus, supported the request, while both Worldspan and Delta strongly opposed it. Delta argued that Amadeus' proposal "raises serious, complex and controversial issues, not the least of which involves the department, for the first time, injecting itself into commercial relationships and pricing decisions between airlines and their corporate accounts. The proposal would create a regulatory morass by injecting the department into GDS discounting, GDS incentives, airline pricing and airline incentive decisions that Congress dictated should be left to the marketplace." New GDS rules are expected by March 30, 2000.