The traditional Global Distribution System is showing further strength as a tool for the low-cost carrier - an airline business model that long shunned this distribution technology in favour of newer and customized solutions.
The latest example of low-fares penetration comes from the Sabre Travel Network, which has signed deals with two major low-cost carriers.
WestJet, based in Calgary, said it signed "a multi-year, full-content" agreement with Sabre for GDS services. The airline declined to specify the length of the pact with Sabre, and Sabre declined to comment on the deal. Separately, JetBlue extended its existing distribution agreement with the Sabre GDS through 2012.
Hugh Dunleavy, WestJet's EVP, commercial distribution, praises the Sabre GDS for "its ability to deliver the highest-yielding guests." GDS systems allow carriers to reach worldwide customers by handling reservations from travel agencies and corporate customers. JetBlue's 2008 reservations through the GDSs and on-line travel agencies brought in a 17% premium for bookings, it said in its recently released annual report.
Both carriers have also signed contracts with Sabre for its SabreSonic Customer Service Solution. SabreSonic aligns WestJet's internal processes to support codeshares such as those the carrier is developing with Southwest Airlines. SabreSonic also allows for more 'sell-up' features that are part of the carrier's unbundling of fares, such as seat preferences. Vito Culmone, WestJet's CFO, told an investor conference that the Sabre systems, when fully implemented, could cost the carrier some $7 million to $10 million a year, but that "the revenue opportunities far outweighed that cost".
At JetBlue, SabreSonic will allow the new York-based carrier to "offer greater revenue-producing codeshares and interline partnership opportunities," says Rick Zeni, the carrier's VP of change management-passenger service system. Zeni also notes SabreSonic's ancillary revenue capabilities. JetBlue's growing relationship with Lufthansa, which has a 19% stake in JetBlue, is expected to include code-sharing.
WestJet is using Sabre to replace an ambitious but ultimately unsatisfactory customized reservation system built for it by Travelport, a system dubbed aiRES. JetBlue will implement SabreSonic in 2010, when it will replace the Navitaire system it has used since its launch in 2000. JetBlue founder David Neeleman was a creator of the Navitaire system for low-cost carriers, the Open Skies system. WestJet, coincidentally, had turned to Navitaire as an initial replacement for aiRES. Navitaire, which is building a new version of its system for low-cost carriers, had no immediate comment.