TWA Links Ticket Information To FF Database

<B> TWA Links Ticket Information To FF Database</B>

By Jay Campbell

<I>St. Louis</I> - Trans World Airlines soon will become the first airline to link the information it takes in from tickets with what it holds in its frequent flyer database.

After its new frequent flyer program, Aviators, takes effect May 1, the carrier will begin to know more intimate details of the travel and spending habits of members, which is both good and bad for corporate buyers.

According to TWA director of frequent flyer marketing Craig Anderson, that level of detail eventually will give the airline the ability to drastically improve its customer relationship management on a number of fronts: in negotiations with corporate clients and agencies, at the airport gate, via direct mail and in combination with TWA's frequent flyer partners in the hotel, car, card and communications industries.

Corporate travel buyers, always wary of any increase in the sophistication of airline information systems, are greeting the news cautiously. The new Revenue Tracking system, as TWA calls its data warehouse, will give it more information on some Aviators members than their own companies have. However, some sophisticated travel departments already track the same data--miles by traveler by airline--and use the information as a negotiating tool.

TWA's sales force is just beginning to consider the uses of the Revenue Tracking system, but it poses a number of possibilities that could change relations between the airline and its corporate customers.

"As we get more information on individual travelers, we can work with a corporate client by pulling up all the info on Aviators members and identifying which fares they're buying," Anderson said.

In raising its level of sophistication about frequent flyer buying habits, TWA and partners like Avis, Dollar, Hilton and even Sprint, will consider opportunities for cross-selling business traveler packages.

"I envision TWA knocking on corporate doors with, or on behalf of, our partners," he said. "This gives us the opportunity to combine our information to create a marketing program designed to consider what an individual customer has done."

The carrier also will do some specialized direct mail marketing to those Aviators members who buy the highest-priced tickets, perhaps offering special double mileage deals. Already, the carrier plans to offer double miles from May 1 to June 30 to stimulate membership.

Gate agents also will have easy access to the traveler's ticket history and will be able to treat customers according to how much they spend on TWA.

"There are so many things we can do--we haven't even scratched the surface," Anderson said.

Asked whether this tool doesn't go against the travel management trend toward travel policies designed to ensure that travelers book lower-priced tickets, Anderson said, "If we see a change of policy (and consequently use of more restricted fares), we'll talk to the company. Our intent is simply to make sure we're getting our fair share. Yes, we hope to see rising trends, but if we see dropping trends, we want to stop it or go in and maximize what's left."

Industry observers last year anticipated that airline usage of frequent flyer data was bound to become more sophisticated (< a href="http://www.btnonline.com/notfound.aspx?target=/db_area/archives/1997/04/97041424.htm"><I>BTN</I>, April 14, 1997), but TWA is the first airline to publicly acknowledge having developed the link between its frequent flyer and revenue databases. If Anderson's ideas about Revenue Tracking come to fruition, the likelihood that other carriers will match and perhaps improve on the system is high. Some, including Continental and United, already are working on it.

"We're there already in terms of structure and capturing the data," said United's director of business markets, Joe Laughlin. "Now, it depends on what priorities you put on it. We're not necessarily putting a revenue priority on it but rather an approach of customizing our customer service at the points of contact with frequent travelers."

And American Airlines last year acknowledged it can measure traffic and revenue on an account-by-account basis (<I>BTN</I>, Aug. 25, 1997).

TWA said development of Revenue Tracking was mostly internal. The carrier began working on it in August 1996, and launched the program Aug. 15, 1997. Anderson declined to elaborate on the cost other than to say, "It did cost some, but it wasn't like we had to go out and buy a whole new system."

Continental bought its revenue tracking system as part of a package from Unisys.

The Eastman Group's AutoLink/PASS tool offers the same functionality. "Any airline that uses /PASS has the capability," said president Richard Eastman, whose company is based in Santa Ana, Calif. "I know of at least two other airlines that are building the database, but I do not know if they have begun to market the product."

Meanwhile, TWA upgraded its yield management system to an origin-and-destination-based system (<I>BTN</I>, Dec. 8, 1997), which came online in February. By improving its inventory and pricing, TWA should be able to better match seat and upgrade availability to demand. The airline has expanded its domestic first class by 60 percent to make room for upgrades.

Under TWA's Aviators program and the earlier Fare Rewards upgrade feature (<I>BTN</I>, Aug. 25, 1997), travelers can be upgraded for buying the higher priced coach fares in F, C or Y class--or for buying any negotiated fare. Meanwhile, travelers still can get upgraded as premium Aviators members (Platinum, Elite One or Elite level) or through negotiated upgrades.

The airline said Aviators makes elite level qualification easier by applying points based on dollars earned, as well as miles. "This can be a problem if people start booking out of policy," said a travel manager for one large St. Louis-based TWA customer.

Consultant Tom Wilkinson, president of The Travel Management Group in Alexandria, Va., reflected much of the opinion of the corporate travel industry in his reaction: "This really crystalizes the struggle between corporations and airlines," he said. "Personally, it puts a lot of pressure on travelers to do the wrong thing."

But some sources applauded the mileage program as a way for financially struggling TWA to remain in business. "Travel managers need to be cognizant of how these things relate to their policies," said Jack O'Neil, vice president of airline partnerships for Maritz Travel in St. Louis. "But I think more importantly, this is a smart, aggressive move by TWA, which is attempting to gain a greater share of business travel. Continental made it through the CALite years in part because it had a strong mileage program."

<B>Award Give And Take</B>

The Aviators program also creates a new 15,000-mile award level that gives travelers a free ticket good for 750 miles or less, and a new 40,000-point domestic first class award (down from 60,000 points), and eliminates the need for paper on earned upgrades. At the same time, it increases requirements for a domestic coach ticket to the industry standard 25,000 miles, up from 20,000, and puts a three-year expiration date on mileage, although travelers simply have to fly TWA once or earn 10,000 partner miles in the three years to keep their account active.

Frequent flyer guru and publisher of Inside Flyer magazine Randy Petersen gave the program mixed reviews overall. "It's a nice change with a nice new name. I like that there's a new reward level at 15,000 miles and the ability to keep your account alive by using partner miles and to purchase miles to top off an award," he said.

However, he added, "I am extremely disappointed that they want to end their old program. TWA has relatively little liability because with all their financial problems over the past five years, many of their customers cashed in their miles. But TWA is now kicking in the teeth those passengers who remained loyal. And a 750-mile award? I don't think there are too many people outside of the Midwest who can take advantage of that."

Petersen also was critical of TWA's decision to increase the requirement for domestic awards. "They said they're being competitive in matching the other airlines at 25,000 miles. But I would think 'competitive' would be at 20,000.