Southwest Airlines has put the ax to more than $1 billion in capital expenditures this year as it fights its way through the Covid-19 crisis. But one initiative the carrier didn't halt is its launch of full participation for travel management companies (TMCs) in the Travelport and Amadeus GDSs. The functionality went live May 4 in Travelport's Apollo and Worldspan systems, with the remaining rollouts expected in the fall. Airlines editor Robert Silk spoke about the launch with Dave Harvey, vice president of Southwest Business.
Dave Harvey
Q: Considering all that is going on, why did you go forward with the GDS launch now?
A: It's twofold. We truly feel like this is a strategic priority for us over the next-five-years horizon. A lot of the projects with the sales team are going to stay toward the top of the list. And we were well into our testing phases when this began. It absolutely made sense to deploy this to the marketplace, because our customers had been waiting a long, long time for this capability.
Q: How is the launch impacted by the fact that sales are so low? Is it like an extended testing period in some ways?
A: You think about our ground ops teams at airports, our call centers, our [business-to-business] partners -- a lot of this now is education.
Troubleshooting, making sure that Southwest is going through their workflow the same way it is for other airlines. This is a kind of extended testing, but you're in production. TMCs and the buyers, if you think about all their midoffice and back office, it allows you that pressure in a production environment to make sure a Southwest ticket flows through end to end.
Southwest president Tom Nealon and Travelport CEO Greg Webb talk about the airline's first full-content GDS offering and why it picked Travelport as a partner.
Q: Why did you begin with Travelport's Apollo and Worldspan GDSs but not its Galileo system?
A: Galileo tends to be used outside the U.S. That's why they are sequenced third.
For Amadeus and Galileo, right now we are saying fall. Our teams are now turning their focus to turning those other two GDSs on. Absolutely, it will be in 2020.
Q: And still no plans for a full-content offering in Sabre?
A: In late January, we said we do not see a path forward with Sabre on industry-standard participation. We are still at that place. I would say the silver lining for any Sabre customers out there is that we did significantly expand our content in the GDS. All of our everyday low fares are in the GDS. So, as of now, they have those exact same low fares, that much-expanded content. Customers that book via Sabre have never seen anywhere close to the amount of content that Southwest has now.
Q: Last October, you said Southwest would enter into interline and codeshare partnerships once it implemented its full-content GDS capabilities. When might that happen?
A: That, realistically, is still a couple years off. There is still a healthy amount of technology work that has to be done on the Southwest side to enable codeshares and interline.
Q: You plan to offer waivers and favors as perks to your GDS channel partners rather than commissions and overrides. Why?
A: With an industry-standard experience and the low fares and product that we bring for the business community and the business buyers, we feel that starting there is the right first step for understanding business demand. The marketplace has never seen the full participation or the content, two huge strategic steps in the right direction. And I'd also mention the sales team we've put around it. And waivers and favors is the fourth leg of the stool. We don't need to do commission and overrides at this point.
Q: And to be clear, this initiative is exclusively for the TMC community, not leisure agencies?
A: This is purely a way to serve our B-to-B customers, so the buyers and TMCs. We maintain which agencies have access. We eliminate all of those leisure-dominant or OTAs and metasearch agencies. We limit them where they can't shop and book us. A lot of these larger agencies, they have a business arm and a leisure arm. They even have different ARC numbers. It's not a pure kind of black and white. But our intention is not to take a lot of leisure bookings through the GDS.
Correction: An earlier version of this report incorrectly used the term "full content" to describe the agreement; it is full participation, meaning GDS users have access like booking, modifying and canceling Southwest tickets and settling through ARC.