While the recent negotiations between Northwest Airlines and Sabre Holdings Corp. proved interesting
(BTN, Sept. 6), what I found most intriguing was the reaction from the travel agency community and their use of technology to minimize the impact upon their services. It takes dramatic events such as this to validate a past technology investment, get a team moving in a particular direction or simply get an agency to give up and handle the situation in a reactive, rather then proactive, way.
Others and I have been preaching the need for agencies to reduce their current dependency upon the "free" global distribution system point-of-sale solutions. Proprietary command line systems provided by a GDS are antiquated, inefficient and history has proven that they are unlikely to provide the shopping and booking capabilities needed by a complex corporate customer. Southwest pulling out of Apollo, Web fares, hotel Web rates, Air Canada pulling out of all GDSs in Canada and hotel merchant model support are all past examples of the need for more robust point-of-sale solutions.
Several agencies have positioned themselves very well to handle moves toward direct connections, such as suggested by the recent NWA situation, with little difficulty. Their ability is based upon establishing solid technical strategies several years ago, investing in their infrastructures and staying committed to their strategies during some very lean years. American Express with TravelBahn is one example of an agency with the necessary tools already deployed to handle the direct connections that the Northwest Airlines approach would have supported quickly. This product gives Amex the ability to modify the shopping displays, change the fare display according to the fees being charged by the supplier and add additional fees to the invoice without impacting agency performance and service.
Carlson Wagonlit Travel with its Symphonie platform is in a similar position. Having its agent desktop and online booking tool tied to a common platform enables CWT to modify the pricing displayed to both the agent and the do-it-yourself traveler. This consistency of service increasingly is becoming important as online and traditional agencies provide proprietary negotiated rates and fares to their corporate customers. WorldTravel BTI currently is investing in TRX's ResX and SeleX point-of-sale technology. However, it historically has relied upon the mid-office to modify the reservation and invoice at time of ticketing. The mid-office is a good solution today, but if the passenger name record becomes fragmented across several sources, robotic systems will have to be rewritten.
I congratulate these agencies on having the foresight, and money, to implement a solution early and to stay committed to the solution while others may have questioned the strategy.
Such online agencies as CheapTickets, Orbitz, Expedia and Travelocity faced similar problems a long time ago. By insulating the buyer from the shopping and booking source, they are better able to modify the shopping and fare displays. Two technology companies that should benefit from the attention raised by the recent turmoil are Navitaire and G2 SwitchWorks. Navitaire has been offering airline connectivity to agencies for years. Unfortunately, GDS incentives and proprietary point-of-sale systems have kept it from becoming a major distributor. With further moves toward direct connections, the value of Navitaire should increase substantially. The company provides a low-cost system connected to the major airlines, including several low-cost carriers, as well as an integration methodology enabling agencies to connect airlines into their own solutions, instead of the other GDSs.
G2 SwitchWorks, based in Chicago, is a startup company with a similar plan. Started by a former Orbitz technology executive and backed by several major airlines, the company plans to create an alternative solution to the GDSs based upon a lower-cost model enabled by a fresh technical approach.
My advice to buyers of corporate travel is to align yourselves with agencies, online and offline, that have invested in systems that enable them to service you, the corporate customer, for the long term. Ask the agencies how they would react to such moves by airlines in the future, and if there is a strategy that enables them to handle similar situations in the future. If their answer is dependent upon GDS tools and relationships, I'd press for a better answer.
Steve Reynolds, formerly chief technology officer for TRX, is a member of the Business Travel News editorial board.