Technology standards for airlines that want to unbundle fares, collect ancillary revenues or employ other merchandising techniques are close at hand, according to the Air Tariff Publishing Co. The company, best known for its role in the collection and distribution of fares and fare-related data, said it will roll out a set of standards in conjunction with two other companies that serve the airline industry in the first half of 2009.
"We're really close," Thomas Gregorson, senior director of product strategy and development for ATPCO, said. He said other companies will be added throughout the rest of the year.
Anyone who says standards are "a long way off" is mistaken, he said. Gregorson and others who are working on the development of standards believe that there is confusion in the industry about what they would accomplish.
"Technology standards do not preclude the ability to differentiate," Kyle Moore, vice president of product marketing for Sabre Holdings Corp., said. "Standards don't mean 'standard products.' They are critically important for the marketplace to evolve, to enable all the different things that airlines want to do in the way of product differentiation."
Technology standards, he said, "are just the way that systems talk to each other. It's about standards of communication, not standards of how you sell."
"Each airline needs to customize," Gregorson said. ATPCO, which has been working with Sabre, Amadeus, Travelport, ITA Software and other companies to develop technology standards, is creating "a flexible infrastructure" to support airlines' individual efforts, he said.
ATPCO first raised the issue in 2005, Gregorson said, when it became apparent that airlines were increasingly interested in offering optional services. "You can go with a one-off solution or an industry solution," he said. "At the end of the day, if you need a system for processing fare rules for optional services accurately and efficiently, you need to build an infrastructure that is extensible and scalable."
A one-off solution, he said, might work well for an airline's Web site, but it's not going to deliver the carrier's offering to all channels, such as its call centers, the GDSs, the major online travel agencies and whatever else may open up in the future.
Some players have cited the slow development of interline electronic ticketing as an example of what happens when standards are not in place. Critics of that comparison note that electronic ticketing is not an issue of product differentiation.
Gregorson believes a better comparison is the handling of negotiated fares. "Everyone said, 'I do my contracts differently,' and they tried to build one-off solutions," he said. "The results were not scalable. There was no consistency. It was inefficient."
Airlines should not fear consistency in technology standards, he said. The standards that are being developed will address "all the different flavors" of optional services.
Jay Brawley, director of sales and customer service for ATPCO, noted that the company has developed a long list of optional services, from alcoholic beverage to window seat to in-cabin pet, each with its own sub-code. He said the benefit of the list is that any airline that wants to merchandize any of the services can use the same sub-code so that, behind the scenes, the data are processed the same way. Moore pointed out that "if we figure out how to support the sale of a premium seat, we can take the same approach for a prepaid bag. It means not having to do a single implementation every time. The same underlying technology is easily repurposed. We're not reinventing the wheel."
He said those who claim airlines can't wait for the development of industry standards are missing an important point: Airlines don't operate in a vacuum. They must interact with distributors, fellow alliance members, payment processors and other trading partners. Standards, he said, will enable airlines to get their merchandising techniques to the marketplace more quickly. "You'll be able to differentiate faster," he said. Moore noted that Sabre provides a CRS for airlines as well as a GDS. "The SabreSonic customer service system hosts 100 airlines," he said. "If we tried to do a one-off, we'd never get anywhere.
"We can't stick our heads in the sand about this," he added.