advisory

To: Travel Managers and TMC Executives

August 16, 2007

Yesterday, Air Canada (AC) and Galileo issued a joint Press Release about a new graphical agency desktop solution. You can read the Release at http://businesstravelcoalition.com/advocacy/campaigns/97.html. This announcement deserves careful attention from our industry, since it promises much, but leaves a multitude of questions unanswered. In the past, AC’s distribution programs have created significant problems for corporate travel managers and TMCs, whose demands for optimal, efficient solutions -- instead of third-rate, inefficient workarounds -- have gone unmet. Whether the AC/Galileo self-proclaimed “technology breakthrough” is a positive change or worrisome development remains to be seen. What is clear is that the stakes are high for managed travel programs in Canada and throughout the world.          

Since May 2006 travel managers have been waiting with increasing impatience for AC to follow through on its long overdue promise to restore Tango content to the GDS channel -- content which it unceremoniously pulled without consultation or notice.  Frustrated travel managers have consistently asked AC for full content and full functionality, at a fair price, through the distribution channels of their choice. Until yesterday, their concerns have largely been ignored. Now we have a well-hyped, but cryptic announcement of a new program that should motivate justifiably skeptical corporations and TMCs to ask thoughtful questions and demand complete answers. 

To start the ball rolling, here are BTC’s initial thoughts: 

FULL CONTENT & FULL FUNCTIONALITY

Where will these bookings – including Flight Pass transactions -- reside, in Galileo or on AC’s website?    If the latter, will all fares be guaranteed, particularly those that do not reside in Galileo? Will the inventory involved be limited to Tango, Tango Plus, Latitude, Latitude Plus and Executive as well as Flight Pass products? Or, will the new program include all AC inventory, thus setting the stage for a radical unbundling and shifting of AC’s distribution costs to TMCs and their corporate customers?  

Will these bookings be available through corporate booking tools?  Which ones? Will internal accounting and billing processes need to be changed for corporations that bill clients for travel should fees be associated with this new scheme? How are itinerary changes, cancellations, and upgrades handled?   How are interline itineraries sold? How does the passenger get a complete itinerary including negotiated hotel reservations and car/limo reservations without entering a passive segment? How are airline schedule changes (not passenger changes) handled and who is notified? What about 24/7 service for these bookings? Is there a phone fee? Does this new system pull second level profile information into the booking? How secure is this?

How can travel managers track the whereabouts of their employees during emergencies? How do travel managers apply their travel policies to these bookings? Will these bookings be integrated seamlessly into the back office and reporting tools? Are these bookings made in real time or are they dependent on synchronization with AC’s website which could have a negative impact on responsiveness and accuracy?

ECONOMICS

Does this model introduce inefficiencies in the form of higher costs to TMCs and corporations? What happens to the end-to-end economics of distribution? Is this an incentive-less model? What about passive bookings in Galileo – are charges for them passed on to subscribers? Does this new model change the core economic relationships among industry participants? Who is going to pay for this new distribution model?  And whatever they are, how long are these economic relationships guaranteed?   

The overarching issue is whether this model is simply another expensive workaround foisted upon the industry by AC, or worse, an attempt at wholesale shifting of distribution costs to the customer. BTC was unsuccessful up until 2:30 pm on Thursday to secure answers to some of these questions from AC and Galileo despite its efforts to do so.   

If you have other reactions, comments, questions or concerns, please feel free to share them by visiting http://www.AdvancedSurvey.com/default.asp?SurveyID=54602, and take our brief, but important poll.

As a reminder, BTC will be conducting a Webcast on September 11 on Canadian travel distribution issues. To register for this free event, please visit http://www.AdvancedSurvey.com/default.asp?SurveyID=54361.