Southwest's GDS deals to help agents, but how much?: Travel Weekly - 0 views
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Southwest's pending move into the Travelport and Amadeus GDSs, coupled with the carrier's entry into ARC's settlement and reporting system, will simplify workflow for travel advisors and make it easier for TMCs and leisure agencies alike to process Southwest purchases.
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"If it becomes easier to sell Southwest, the competing airlines may take a look at it and say, 'We might be losing share,' and they may address it in a competitive way."
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"In some instances, we have found lower fares on the Big Three carriers. I don't believe we will see an increase in competition, since they are already competing in the marketplace."
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Southwest announced on Aug. 5 that it will provide full content in the Amadeus and Travelport systems beginning in mid-2020.
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Travel advisors booking Southwest through Amadeus and Travelport will be able to change, cancel or modify reservations directly through the systems. Agents who currently book Southwest through Sabre must call the airline for any ticket modification that is not a cancellation.
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For Southwest, broader entry in the traditional agent channel will serve as a third prong in the airline's distribution offering for business and leisure agency partners, joining its direct channel and the SWAbiz booking tool.
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The company projects that it will earn between $10 million and $20 million in additional revenue in the second half of 2020 as a result of the move.
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"It's an intelligent compromise on Southwest's part, because to compete with other airlines in the corporate market they have to sell their tickets through the channels that corporate customers want to use,"
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Last month, Southwest joined NDC Exchange, an airline product marketplace operated by ATPCO and SITA that facilitates direct-connect capabilities between airlines and agencies using NDC protocols. While NDC is especially useful in enabling airlines to sell ancillary products such as fare bundles and checked bags through the agent channel, Offutt said it's also important as a way to attract ordinary ticket sales through alternative booking paths.
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"I think Southwest realized that as NDC moved from aspirational toward practice, they had to go down that path or be left behind,"
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while the increased functionality will make sales-tracking more efficient for agencies, it will also provide greater visibility of Southwest purchases to competing airlines, thereby making it easier for those carriers to monitor whether agencies with which they have corporate contracts are meeting market-share goals.
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Southwest's broader entry into the GDSs will result in the legacy carriers boosting the incentives they offer corporate and leisure agencies.
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GDS systems are predominantly used by travel agencies to book both individual and corporate travel. By expanding their listings to Travelport and Amadeus, Southwest opens themselves up to increases in bookings but also potentially moving into better competition with larger airlines. Moving into these systems also allows them to offer further NDC enabled content, such as fare bundles and checked bags, helping to build even more bookings.
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Southwest has always been on the outskirts when it comes to the top airlines. The "big three" are known as American, Delta and United. In order for Southwest to stay in the game, they are providing full content in Amadeus and Travelport systems. Amadeus is known for its European market and Travelport is known for its US market. Southwest already belongs to Sabre, which is also a US market. However, "those offerings will both complement and exceed Southwest's current limited-content availability on Sabre" (Silk). Henry Hartveldt states that "given Sabre's leading presence in the U.S. market, Southwest will elevate its participation in the Sabre GDS as well" (Silk). Of course, by only belonging to one GDS presence, Southwest was not able to compete with the big three, however, now Southwest is back in the game. In order to sell your tickets, you must be available in the channels that customers prefer to use. Southwest realized that "they had to go down that path or be left behind" (Silk). Vlitas believes that "Southwest's broader entry into the GDSs will result in the legacy carriers boosting the incentives they offer corporate and leisure agencies" (Silk). Other airlines may fear more GDS entries from other airlines, however, it is clear that GDS is here to stay.