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Aviation History
1987
1987 - 1976.PDF
AIR TRANSPORT Sabre crusades for neutral CRS in Europe LONDON The concept of using an airline-owned computer reser vations system (CRS) as a weapon against airline com petitors is dead (or at least moribund) in the USA, and doomed in Europe. The only question is how long Europe's dominant CRS-owning air lines will be able to continue to get away with bolstering their near- or actual monopo lies by the discriminating use of their systems. That, at least, is the view of US carriers which operate into Europe. In the USA, CRS is now so closely controlled by Depart ment of Transporation man datory regulations and accepted codes of practice that, for flight-booking and ticket-selling purposes, they are about as close to neutral ity as a system could reason ably be expected to get. That does not mean that it has always been so; but today travel agents are sold a CRS on its merits as an efficient, competitively-priced informa tion distribution, booking, and sales instrument. The carriers which own the CRSs, having been deprived of the opportunity of using the system as a weapon, sell it now as a money-earning service in its own right. American Airlines' Sabre computer system, which runs the biggest CRS of them all, gives the airline massive computing and software capacity for innumerable other tasks, including assess ment of competitors' per formance and marketing tactics. However, this does not detract from the fact that its information displays are competitively neutral. Searching for an example, Flight "asked" a Sabre display to show flights from New York City to Tucson at 0800hr, and an American airlines route did not appear until the third "page," even though the departure and arrival times were close to those requested. The American carriers who operate into Europe, and particularly CRS-owning carriers, complain that the European CRSs are biased towards owner carriers by a number of methods, and that when it comes to competing for travel agents' business the Europeans have their ways of making a non-indigenous CRS inefficient for the agent, so that he will not adopt it. This will all stop, the Amer icans believe, because in the long run it does nobody any good, especially any one who is spending the sums neces sary to develop multi-airline- owned European systems such as Amadeus and Galileo. But, in the slightly shorter term, the US carriers are making sure that their Govern ment is putting heavy pres sure on nations with which it has bilateral air transport agreements to enforce neutrality in CRS booking and ticket sales information. The method by which this neutrality is achieved is of no concern at Sabre. "We recog nise that our Government does not have a monopoly on wisdom," says David Schwarte, Sabre's vice- president in London. The most vital of all the rules needed in Europe, Schwarte says, is one which makes it unlawful for the "dominant carrier" to refuse a competing CRS the right to issue its tickets. For example, British Airways currently refuses to allow Sabre systems to issue tickets on BA in Britain, which makes Sabre almost useless to a British travel agent. Sabre is free, of course, to issue BA tickets in the USA and Canada. Sabre alleges that BA has announced that it will tie any override commissions (addi tional commissions for performance) to the use of Travicom, its own CRS, owned jointly with British Caledonian. The threat alone would be enough to put most UK agents off owning any system except Travicom, says Sabre. Such methods, or any others aimed at discrimi nating against agents for choosing a competing CRS, should be prohibited in Europe as they are in the USA, in Schwarte's opinion. He has made representations not only to the US Depart ment of Transportation, but to the British Monopolies and Mergers Commission, in a filing which opposes the BA/BCal merger. BA's defence of Travicom (the system is used by 97 per cent of all British CRS- equipped travel agents) is that it is truly non-discriminatory in flight selection because an agent can patch into the CRS of some 50 carriers worldwide —including Sabre—for flight information. But it is Travi com which then makes the booking, issues the ticket, and collects the sector payments. Schwarte responds that Travicom is not a CRS, but simply a switch which gives agents access to CRSs, one of which may be Sabre. But in the UK it is most likely to be BABS—BA's own CRS. With Sabre the agent simply has to enter details of departure point, destination, and time of departure, and he is then presented with a "neutral" display of all the flights, carri ers, and routings which would be appropriate. Another Sabre's simplified version of how it says BA's Travicom works. BA says that Travicom allows agents access to systems all over the world, and is therefore neutral. Sabre says that Travicom is not a CRS, it is a switch; the agent first has to choose the system or the airline, not simply to enter the time and route required, so there is an inherent capacity for bias Travel agents' Travicom VDU BABS (BA) Air France 46 other systems command would provide the cheapest of them. With Travicom, however, the first thing the agent has to do is to choose the airline or the CRS he wants. Since BA is the dominant carrier, Schwarte responds, agents tend to "camp" with BABS, being familiar with its oper ation. Learning the operation of the 50 systems available through Travicom is some thing few agents and their screen operators would do. Flight patched into BABS through Sabre and demanded a London-Dallas service. Normally one has to go to the "third screen" before Ameri can's direct Gatwick-Dallas service comes up—all the BA one-stop services are shown first, Schwarte alleges. In fact, when Flight tried to "book" to Dallas, BABS did not mention the American service at all. On Lufthansa's START CRS, says Schwarte, as a result of American nego tiating pressure over the US/German bilateral, for a year agents have been able to select a neutral display on Germany-USA routes; but the agent has specifically to command neutrality, other wise he does not get it. Europe's major carriers own CRSs which are "inherently biased" in favour of the owner airline, yet other carriers sell tickets through them because of the systems' power and monopoly, he says. The US carriers have complained to their DoT about BA's business reaction to Sabre's initial arrival in the UK in early 1986. BA slashed Travicom charges to agents, and paid them a "support" fee which, Sabre says, changed the net cost to the agent of a typical installation—three visual display units and a printer—from £4,356 out goings to £3,550 income. Sabre says that an Ameri can system could not operate profitably that way because it is neutral and makes money independently of its airline owner only as an information and booking machine. BA's ability to pay money to have agents keep its system is a reaction to the fear of losing the airline income which a "biased" system brings in, according to Schwarte and the FLIGHT INTERNATIONAL, 10 October 1987
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