Sabre in the next few weeks will begin accepting from the Airline Tariff Publishing Co. electronic feeds that include corporate negotiated fare rules and formulae filed directly by the airlines.
With Sabre joining Galileo and Worldspan, carriers are expected to take on more corporate negotiated fare filing under ATPCo's category 25, unburdening travel management companies from the responsibility of applying corporate fare rules manually at the point of sale or loading them into electronic global distribution system templates.
Also called Fare By Rule, category 25 allows airlines to file in ATPCo increasingly complex corporate contract terms, thereby improving faring accuracy and reducing agency debit memos. Category 25 capability previously had been developed by Galileo in the North American market and Worldspan globally
(BTN, Aug. 12, 2002). Galileo said it will expand its category 25 capabilities globally sometime next month.
Once fully realized, category 25 filings will benefit buyers and travel management companies by minimizing a complicated fare-loading cycle, said Vinay Gupta, AT&T manager of global travel supplier management. "The travel manager needs to make sure contracts are interpreted correctly," he said. "It's the last step of the negotiating process and the first step of the implementation process."
Meanwhile, the development and adoption of GDS pricing and content models, and such new distribution channels as Orbitz, have helped to define where various airline and agency players stand regarding category 25 fare filings.
Northwest Airlines in June plans to begin loading corporate rates via ATPCo into Orbitz For Business, as well as its own Web site
(BTN, April 28). Delta said it already has taken on ATPCo category 25 filings for at least one client, McDonald's Corp., in conjunction with that company's arrangement with Orbitz
(BTN, Feb. 28).The functionality also is an element of Galileo's Momentum program, at least where Rosenbluth International is concerned
(BTN, Feb. 10). The three enrolled carriers—Continental, United and US Airways—will move to automate negotiated fare filings into the Galileo GDS, assuming the corporate fare filing responsibility from Rosenbluth as part of their contribution to the program. Continental said it already has begun testing category 25 feeds.
"In general, Rosenbluth is pushing as best we can both our carrier partners and GDS partners to deliver these fares in the simplest, most direct manner," said Eric Henderson, Rosenbluth vice president of supplier relations. "It is a transitional and a strategic process."
Category 25 also may play a role in Sabre's Direct Connect Availability three-year option
(BTN, Oct. 28, 2002). "It is part of the conversation, but not a show stopper," explained Kevin Davis, Sabre vice president for product marketing, shopping and pricing, who noted that airlines whose reservations systems are hosted by Sabre need not make such arrangements. "If I am not a hosted airline, I ask, 'Can you handle my preferred method of distribution?' " US Airways, hosted by Sabre, signed on to DCA, as did United, which is not Sabre-hosted.
An American Express official, meanwhile, could not discuss whether automated fare filing played a role in recent Web fare access agreements between the agency and both American and Continental
(see story).ATPCo president Mike Ferrier said he is not surprised category 25 is coming up as a negotiating point among carriers, distributors and their clients. "Everyone is under such cost pressures that wherever there is a pressure point, I'd expect people to exploit it," he said. "One thing driving carriers in this whole project is having control over the data to make sure whatever they have done is correct in the marketplace."
Randy Smith, Galileo senior director of product innovation, echoed that observation. "When the airlines came to us, they wanted to take on the maintenance and get a lot of that data under their control rather than in an Excel spreadsheet at a travel agency somewhere," he said.
"Eventually all corporate agreements will be filed and maintained by us," said Scott Slater, Delta general manager of corporate programs, who said the airline is funneling all new and renewed corporate contract terms through category 25. For now, Delta is not requesting in return any incentives or compensation. "We know there is value, but we have not yet taken a position. Of course, in the current environment, nothing is off the table. Every carrier and every client is looking for every nickel under every rock."
United, which selectively is filing category 25 contract terms for some larger clients, also is not charging for the service but has not ruled it out. Continental in the past has charged clients for direct filing but last week declined to clarify its current policy. Other major carriers were unavailable for comment.
ATPCo's Ferrier said the process requires "less data management once all the data is systemized," but carriers must allocate resources to it.
"We have a team—the pricing implementation group—that does nothing but this," said Delta's Slater. "It takes times and it is complicated."
An American Express official said, "Anything the airlines do to make it easier is to the client's benefit."
According to Steve Ross, United manager of product and process, directly filed corporate fares have become an element of the corporate negotiating process. "It is getting built into RFPs," he said. "It is not yet a requirement but more and more becoming a request."
Galileo's Smith said that "thousands" of category 25 fare rules have been filed by carriers into the Galileo system but ATPCO's Ferrier said overall he has "not yet seen the explosion we are anticipating."
Travel agencies will retain most corporate fare filing duties for the foreseeable future, especially since category 25 cannot yet handle certain multi-leg itineraries with more than one corporate fare rule.
"If I am an agency, I may take the path of least resistance and maintain that service myself and maintain the fees for providing that service," said Sabre's Davis. "In the short term, there still will be demand and a need for agencies and corporate travel managers to manage their own contracts directly with their GDS of choice."
On the other hand, the traditional process of creating a GDS template and "getting it checked and double checked takes a lot of business days," said Delta's Slater. "When we create category 25 filings ourselves, debit memos go away and we also save all that administration and hassle."
Before category 25, the most advanced method of applying corporate discount rules and rates was through such GDS templates as Galileo's PrivateFares, Sabre's Snap and Worldspan's SecuRate. For these, agencies load contract data into one or more GDSs on behalf of each corporate client. The new category 25 process reduces data entry because it applies a single contract term to multiple clients, fare types, locations and other parameters in all participating GDSs. Sources described that as a "one-to-many" relationship.
"Airlines like the flexibility of category 25 in that they can apply a discount to an existing published fare and can create a new product by modifying some of the rules," Davis said. "For example, a traveler from corporation X traveling between LaGuardia and Washington on Delta may get a 10 percent discount on a mainline jet or a 20 percent discount on a regional jet."
Sabre said it is testing the upcoming capability with various airlines in North America and Europe.