Galileo resolves to take on web fares
Galileo International last month said it will offer multiple solutions for finding and booking Web fares, including a new option for suppliers to provide traditionally Web-only content in return for lower bookings fees. Galileo also reiterated its Web fare work with Rosenbluth International and TRX Inc., and announced a new partner in Atlanta-based AgentWare. Galileo's pricing model for Web-only fares is under discussion with "several major global carriers on the terms of participation," said Galileo senior vice president of global supplier business development Flo Lugli. "We're still finalizing the financial models, but we're confident that our price points will provide significant value. This initiative moves us further down the path of coming up with a new economic model for distribution, where we drive cost to the party gaining the value from the service." Agencies and corporate clients would not be required to pay for the service if they do not use it.
Airline Loan Guarantees In Question, Vanguard Denied
Federally backed loan guarantees for U.S. carriers, a financial recovery mechanism crafted in the wake of Sept. 11, could be delayed and/or reduced if pending congressional legislation is finalized. The House of Representatives late last month approved an emergency spending bill, including a provision that postpones such guarantees until Oct. 1. A similar version is in the hands of the Senate and could reduce by more than half the funding for the loan guarantee program. The Senate is scheduled to reconvene today (see story, page 6). Any delay in approving loan guarantees could negatively impact US Airways, which plans to apply to the Air Transportation Stabilization Board in the coming weeks. United Airlines also is considering a loan application. Meanwhile, Vanguard Airlines last week became the first carrier to be rejected by ATSB. The airline is working to file a revised application while seeking additional private funding.
EC Concerned About Carrier Competition
The European Commission increasingly is becoming concerned about whether negotiated deals between dominant national carriers and corporate clients are in breach of European competition law. If the EC receives a complaint, it could take action to outlaw such deals in a manner similar to when it banned national carrier deals with agents that reward them for delivering incremental business. A complaint on that issue from Virgin Atlantic in the 1990s led to British Airways scrapping its agency commission system in favor of flat booking payments. "There is increasing evidence that corporate deals have the potential to be an abuse of market power," said Michael Gremminger, an official with the transport unit of the Commission's competition directorate general, at an Association of Corporate Travel Executives forum in London. The main areas of concern were across-the-board discounts, instead of individual deals route by route and what he referred to as "tying and bundling practices." The fear is that corporations will give the lion's share of their business to a single carrier when other airlines might offer better prices on individual routes.
U.K. Low-Cost Carrier Debuting Site To Track Corp. Data
British low-cost carrier Go! later this month will launch a Web site for large corporate clients that will enable them to collect management information and track travelers in the event of emergencies. Go For Business will give an additional 3 percent discount on the airline's standard Web fares, which are $15 cheaper than Go's offline prices. Travelers at corporations that sign up will be given a password, plus a unique identification number that will be the basis for compiling management information. Go will provide the data to clients on a monthly basis. News of Go For Business follows hard on the heels of Go signing a deal to distribute through Galileo International. However, there is a question mark over Go's attempts to open new methods of distribution. The airline is set to be purchased next month by its no-frills rival EasyJet. It is expected that EasyJet CEO Ray Webster by year-end will decide whether to retain the Go For Business Web site and the deal with Galileo.
NBTA Aviation Committee Completes RFP, Examines Fares
The aviation committee of the National Business Travel Association this spring completed a glossary of terms and a standardized global airline request for proposal, both of which will be presented this July during NBTA's annual conference in Salt Lake City. Among other topics the committee plans to address is the airfare structure, with a goal of reducing its complexity without jeopardizing viability of airline suppliers. The committee also is looking at Web fares and is considering whether to develop a white paper in time for the conference.