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.
But beyond that, industry experts last week expressed
varying views about how the long-awaited move to GDSs by the country's largest
domestic air service provider will change the landscape.
"It's a competitive marketplace," said Brian
Chapin, senior director of airline supplier relations for Ensemble Travel
Group. "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."
Conversely, Shane Chapman, senior vice president of airline
industry relations for Ovation Travel Group, said he did not expect a major
ripple effect within the agent channel.
"The perception is that Southwest is the lowest-cost
carrier, but in our experience, there are many instances where, in a large
amount of markets, the Big Three [American, Delta and United] are very
competitive," said Chapman, whose agency works mainly with Sabre. "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."
Southwest announced on Aug. 5 that it will provide full
content in the Amadeus and Travelport systems beginning in mid-2020. Those
offerings will both complement and exceed Southwest's current limited-content
availability on Sabre.
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.
Further, the Travelport and Amadeus agreements will enable
agents to see Southwest's full flight-by-flight availability by fare classes,
down to the last ticket, just as they can with other major U.S. carriers. That's
an upgrade over Southwest's content on Sabre, which Chapin said shows flight
schedules but requires agents to specifically price out each flight they are
On the back-end side, Southwest's entry into ARC will enable
agencies to track and settle GDS sales seamlessly.
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. 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
Henry Harteveldt, founder of Atmosphere Research Group,
predicted that given Sabre's leading presence in the U.S. market, Southwest
will elevate is participation in that GDS, as well.
But in a recent interview with Travel Weekly's sister
publication Business Travel News, Southwest president Tom Nealon was coy about
whether the carrier would add further to its GDS presence.
"We're pretty happy with the two we have," Nealon
said of Travelport and Amadeus. "And if there are more interested, we're
certainly willing to talk."
Harteveldt said that by finally broadening its GDS presence,
Southwest is acknowledging that it was not able to compete with the Big Three
in the business travel market on its own terms.
"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,"
Bob Offutt, senior technology analyst for Phocuswright, said
he believes Southwest has decided to expand its GDS availability in large part
due to the growing importance of being able to offer IATA's New Distribution
Capability (NDC)-enabled content across various distribution channels.
"Southwest will be unencumbered and able to introduce
NDC ancillary content through the Travelport and Amadeus NDC initiatives,"
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.
Peter Vlitas, senior vice president of airline relations for
Travel Leaders Group, said he, too, sees Southwest's broader move into the GDSs
through the NDC prism.
"I think Southwest realized that as NDC moved from
aspirational toward practice, they had to go down that path or be left behind,"
But he added that as the airline steps up its offerings
within the GDSs, it remains to be seen if it will provide the type of hands-on
support to TMCs and luxury leisure agencies that the Big Three do.
"Will Southwest have a team that an agent -- corporate
or luxury -- will be able to reach and say, 'I have a problem. Help me?'"
Vlitas also pointed to a potential downside for agencies as
they book and settle more Southwest tickets through the GDSs and ARC -- namely,
that 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
Conversely, Vlitas is in the camp that believes Southwest's
broader entry into the GDSs will result in the legacy carriers boosting the
incentives they offer corporate and leisure agencies. He said he expects the
carriers to target those incentives to especially competitive and high-premium
Jamie Biesiada contributed to this report.