Unlimited pass now being sold by Air Canada

In yet another move signaling its growing independence from GDS distribution, Air Canada last week expanded its flight pass program for U.S. travelers, enabling consumers or travel agents to purchase subscriptions for an unlimited number of flights between the two countries.

The passes, which are available in three- or six-month subscriptions, are not offered on the GDSs because "their technology does not provide for the ability to distribute this product," said Air Canada spokesman John Reber.

Since removing its lowest Tango fares from the GDSs in May, the airline has built out its ability to distribute its inventory more widely online. It said the same technology could also help resolve its GDS impasse.

"Air Canada does not have a strategy away from the GDSs," Reber said. "In fact, we are exploring many solutions inclusive of utilizing the new ... technology to try to solve the technology gaps in order to distribute our products as they are meant to be, with full attributes available."

Sabre, however, is not swallowing the technology gap theory, stating that it continues to work with Air Canada to develop "a comprehensive set of solutions with merchandising capabilities consistent with their Web site."

The flight-pass initiative also widens the inventory gap and complicates the work of agencies trying to service their clients. 

Consumers can purchase the product at www.aircanada.com, and travel agents can buy it for clients at www.aircanada.com/agents.

The purchase occurs in a single transaction, but consumers pay for the subscription service in fixed monthly payments from their credit cards.

Once the purchase is made, consumers have the option of managing and booking flights on their own or having their travel agents do it for them.

The Manage Your Flight Pass section of the airline's agency Web site enables the agents to book flights, make changes and cancellations, confirm upgrades and view remaining credits.

Agents can also reconcile cash rewards from the airline with the number of passes purchased.

Consumers can "self-manage their pass," Reber said. "That's what the pass-holders appreciate: the ability to simply log onto their personalized flight pass and use their credits whenever they want."

The pass prices include airport fees, charges and taxes.

The airline's expansion last week of flight passes to the U.S. market follows its introduction in August of multi-trip flight passes through the prepaid purchase of 10 or 20 one-way flight credits.

In July, it launched a U.S. Small Business Pass, good for up to 30 flight credits for a maximum of eight employees over six months.

In tandem with the small-business program, that same month it began a U.S. Corporate Pass initiative that's geared to as many as 300 employees for unlimited flights between the U.S. and Canada and within Canada, a program for large corporations, with terms subject to negotiations.

Air Canada introduced flight passes for domestic Canada travel in 2004, and it offers passes for London travel, too.

In other tweaks last week to its U.S. program, Air Canada implemented a second price point, the no-frills Tango Plus fare, for multi-trip and now "unlimited" passes. Previously, the multi-trip passes were available in the U.S. only at the more flexible and costly Latitude fare level, although the two corporate programs already had both fare options.

Also, Air Canada expanded the coverage of flight passes in the U.S. from selected cities to its entire U.S.-Canada network, including departures from 53 U.S. airports.

The new Flight Pass to Canada is being offered for an introductory rate through May 7 starting at $1,657 per month for unlimited travel for three- or six-month periods.

The flight pass comes with elite frequent-flyer miles for purchasers who opt for the pass at the Latitude fare level, starting at $2,630 monthly.

Reber said the passes were suitable for corporations and their employees, adding that most corporations use several types of passes.

"Corporations tend to initially have employees who use primarily individual passes," Reber said. "Then usage evolves to a mix of small-business passes for up to eight users, which could mean a department, a project team, or participants attending an event or meeting.

"We negotiate terms of the Corporate Pass, valid for up to 300 users, directly with large corporations."

A business travel advocate and agencies in the U.S. and Canada offered mixed reactions to the program.

Kevin Mitchell, chairman of the Business Travel Coalition, argued that Air Canada's pass program was an expensive proposition for large corporations because its absence in the GDSs required extensive "work-arounds" that could raise back-office and security issues.

"It's just one more erosion of the corporate travel model of full content," Mitchell said. "What Air Canada is really doing is offering its very best fares, its best value, to small companies and individual business travelers. The biggest customers can't get the best fares." 

Michael MacNair, president & CEO of MacNair Travel Management/American Express, said one of his agency's clients had been considering Air Canada's program, but they mutually decided to take a pass on the passes.

"To manage its travel well, and to ensure proper reporting, track the employees and bill back to its customers or departments for the price of the tickets, we were going to have to manually build the reservation into the system and, as such, we needed to charge a bit more for the process," MacNair said. "So, we all decided it wasn't the best value."

Roz Garber, president of Garber Travel in Chestnut Hill, Mass., said her agency had sold "very few" multi-trip passes in the U.S., but had been selling more in Canada where she described them as "popular."

Garber is not keen on the restrictiveness of the passes.

"For example, two corporate clients bought individual passes and then the travelers left the company," Garber said. "Air Canada would not refund or allow anyone else to use them, so they were a complete loss to the company."

Garber said she thought the pass concept could be "a good one" for small companies and individual business travelers, but the agency faces reporting hurdles.

"Air Canada supplies reports, but we would then need to merge them [manually] into our corporate reporting structure," Garber said.

Marc Casto, president and COO of Casto Travel in Santa Clara, Calif., gives Air Canada high marks for creativity, but adds that this "looks like another means to bypass the booking process that corporations have in place."

Any corporation, he said, wants to determine how and where it is spending its travel dollars, but the pass program "doesn't lend itself well to information gathering."

Agents at Forbes Travel in Vancouver initially resisted the passes but now "don't mind handling them," said agency partner Lisbet MacKay.

"If these work for your travel patterns, there are substantial savings," MacKay said. "Our goal is to keep the customer happy. We recommend the passes in certain situations."

The agency has been selling the passes mainly to small companies and a few individuals.

"We do the bookings for the corporate customers, and we keep track of the credits," MacKay said.

Another agency official in Canada, Daryl Silver, president of Continental Travel Group in Winnipeg, Manitoba, likes the ability to upgrade pass holders to Executive Class, a perk that comes with buying the passes at the Latitude fare.

"The concept has worked fairly well for our customers," Silver said. "We do the business-class upgrades 365 days a year at midnight the day before departure to ensure our customers get the best opportunity to get the upgrade."

To contact the reporters who wrote this article, send e-mail to Dennis Schaal at [email protected] or Nadine Godwin at [email protected].