US View – September 2007

Deal will do the Tango The global distribution systems are making some headway on a key technology issue in North America and abroad: how to accommodate airlines’ push to merchandise their products in new ways, and to ensure that online and traditional travel agencies get in on some of this action. In this regard, Galileo…

Deal will do the Tango

The global distribution systems are making some headway on a key technology issue in North America and abroad: how to accommodate airlines’ push to merchandise their products in new ways, and to ensure that online and traditional travel agencies get in on some of this action.

In this regard, Galileo and Air Canada recently signed a multi-year deal that will make all of the airline’s unbundled fare options and flight passes available on a new, graphical desktop for Galileo subscribers in Canada later this year.

Air Canada greatly complicated the distribution equation in North America in May 2006 when it removed its Tango fares, the airline’s lowest fares, from the GDSs. That meant that those fares, which cover travel within Canada and the Canada-Florida market, suddenly could only be booked on AirCanada.com. A couple of the GDSs retaliated by relegating Air Canada’s other higher-yield fares to the Siberia of agent displays.

Air Canada argued at the time that the GDSs’ format-driven green-screen technology, still the preferred booking option for legions of travel agents, was not up to handling the airline’s sleek merchandising goals – for example, offering advanced seat selection for a fee or handing out discounts for leaving suitcases at home.

But, Galileo and Air Canada, now say they have engineered a technology “breakthrough”. And, this means that the airline’s Tango, Tango Plus, Latitude and Executive Class fares, which enable consumers to add services such as meals and checked bags for a fee and to subtract them for discounts, will soon be available on the Galileo GDS, and presumably to sites it powers, like CheapTickets.com.

Closing the great content gap became possible because Galileo is set to introduce a new desktop with a GUI and it will use what officials describe as “an online travel framework” already deployed in Australia to aggregate content from low-cost carriers. In the Air Canada case, Galileo’s software will talk to Air Canada’s AC2U API, which is designed to enable distributors to develop software that links to the Air Canada site.

The deal makes Galileo the first GDS to offer Air Canada’s merchandising capabilities, much to the chagrin of North American market leader Sabre, which is understood to be fairly grumpy about the development. Air Canada officials noted that although talks are ongoing with other GDSs, the airline’s resources would be focused on implementing the Galileo pact.

Sabre, which has warred with and alienated Air Canada over the withdrawal of Tango fares, said it did not believe an API-centred approach was efficient because it involved just one airline. Sabre instead advocates “an industry-wide solution” that would enable multiple airlines to offer their new types of mix-and-match fare attributes in the GDSs.

Air Canada, after all, is not alone in its efforts, with numerous other airlines introducing or working on solutions to unbundled fare features. Sabre, too, is developing its own solutions in this arena.

In mid-August, just days after Galileo and Air Canada toasted their new collaboration, Sabre trumpeted its introduction of Sabre Branded Fares, with Qantas as the launch airline. In limited release at the moment, and covering only domestic fares in Australia, the solution enables Qantas to brand a bunch of fares with different attributes and to offer them through the gamut of channels, including on the travel agency desktop, according to Sabre.

Meanwhile, in the US, Sabre said its Distribution Merchandising Suite is enabling Midwest Airlines, a domestic carrier, to offer a premium-seating option, the cushy Signature seating, in the airline’s all-coach cabins.

For now, Signature seating, which enables passengers to stretch their toes a bit, is available via Sabre only through the Midwest website and airport kiosks. But, Sabre stated that the GDS itself and agents will get the option to book the added Signature legroom “in the coming months”.

As is apparent, the race is on not only for the GDSs to craft ways to deal with airlines’ new merchandising bent, but also to get the GDS public relations spin out there.

Farecast makes move into hotels

Farecast, the Seattle meta search firm that mines databases for historical airline fare trends, has branched out into hotels.

Covering about 30 US destinations, and a bit sporadic at the moment about comprehensiveness in those cities, Farecast’s hotel beta site informs users whether a hotel search retrieved on a rate on a third-party website is ‘not a deal’, ‘average’ or a ‘deal’ when measured against the property’s historical rates.

So, a Farecast search for a New York City hotel room for September 25 to October 2, 2007, retrieved a ‘deal’ for $895 per night at the Ritz-Carlton New York Battery Park through ReserveTravel.com.

Selecting the Rate Key link on Farecast.com, a user would learn that the $895 per night rate actually is 6% less than the property’s historical rates for September 25 to October 2, and 62% cheaper than average price for Tuesday to Tuesday stays at the property.

However, looking at it historically, even that information is not a major consolation for my particular wallet.

That being said, Farecast’s business model is to attract transaction fees from third-party websites when consumers indeed follow Farecast’s guidance and navigate over to book the property on partner websites.