OpenJaw Technologies CEO contributes to ABTECH Fares Distribution Conference.

Dublin, Ireland, 25 May 2003 -

OpenJaw Technologies CEO, John McQuillan was one of the presenters at ABTECH's fully subscribed one-day seminar on 20th May 2003. The theme for the day was: Airline Fares - Distribution and Management and the discussion during the day was lively and thought provoking.

It is clear that the trend for airlines is to simplify fares - but there are significant problems for traditional airlines in applying the no-frills model to pricing. Airlines are worried about the risk of dilution. They have adopted complicated fare rules and use revenue management to control access to capacity. However, the low cost airlines have demonstrated that you don't need both. They have unrestricted one-way fares and use revenue management to control access.

In his keynote speech, Jerry Foran of British Airways described the ways in which the low cost carrier model, together with the impact of the Internet, is causing established carriers to start to move in the same direction.

But BA cannot easily apply the low cost model. Firstly, established carriers are generally full network airlines. They operate short haul flights as feeders into their long haul networks. And the knock-on effects of pricing changes reverberate across the network. Secondly, there are significant problems in applying this form of simplification to B2B fares, with a whole raft of infrastructure - BSP, audits, debit memos for incorrect fares and so on. These all represent costs that could in theory be saved, but it isn't easy to simplify the whole chain at a stroke. So while consumers profit from the new simplified approach to fares, it looks as if travel intermediaries will have a wait before these infrastructure issues can be addressed.

To illustrate the impact of the Internet Claude Demeestere of Amadeus quoted a view from analysts at JP Morgan, that the distribution savings airlines are achieving from direct sell via the Internet may well be less than the revenue they lose through price reductions forced by online transparency. As this becomes apparent, airlines may wish for online prices to rise again, but competition from the low cost carriers may restrict the extent to which this is possible.

Pat Minogue, Galileo's general manager, UK was representing TOWARD as a supplier to the tour operator working group, has high hopes for what the group can achieve. He hopes the working party will be able to identify an agreed format for airlines to pass net fares to operators. He said: "Failing to agree bodycopys doesn't do the airlines any good, and restricts the uptake of net fares." The objective he said is "To improve electronic distribution and fulfillment of tour operator product to agents and consumers by identifying, agreeing and publishing necessary business practices and bodycopys."

Following on the issue of agreeing practices and bodycopys, John McQuillan explained how XML changes the game. He suggested that XML and Web Services aren't just another set of bodycopys, which may or may not be adopted. It's a migration towards the bodycopyisation of interfaces, which carries tactical and operational benefits 'on the way'. You don't have to wait for across-the-board adoption before you start seeing benefit.

At the end of the day, the hope for the trade is that the value of the intermediary will become widely appreciated by the cash-rich time-poor generation, so that despite the online accessibility of attractive fares consumers and businesses will continue to find a place for agents in the booking process. If airlines and their partners do not make the time to re-engineer inefficient B2B booking processes, this may be a false hope.

For OpenJaw enquiries please contact:
John Mc Quillan
tel: +353 (1) 882 5444
email: john.mcquillan@openjawtech.com
web: www.openjawtech.com

For ABTECH enquiries please contact:
Graham Barnes
tel: +44 (0)1747 821490
email: info@abtech.co.uk
web: www.abtech.co.uk