Southwest has been a thorn in the side of many travel management companies. Now they have a shot at a mutually beneficial relationship with the airline.
Over the past 50 years, Southwest Airlines has grown from a regional, low-cost operation to one of the biggest airlines in the United States. Yet even through its rapid expansion, the company chose to keep its distribution very limited, forcing most travelers to book flights directly on its website.
In the world of corporate travel, where most employees book through company policies, this was not just odd but frustrating and costly for travel managers.
Now, all this is changing. At the Global Business Travel Association’s annual convention in August, the airline announced it had signed agreements with Amadeus and Travelport, two major global distribution providers. The company is finally making its inventory widely accessible to travel managers, and in doing so, it hopes to grow its renamed business platform, Southwest Business.
The agreements, which will take effect by summer 2020, will give both Amadeus and Travelport full access to Southwest’s flight schedules and pricing. It will allow travel managers to change and cancel flights through the system without having to pick up the phone and call the company directly.
For travel agencies this moment has been a long, long time coming.
“Southwest is moving in the right direction,” said John Bukowski, director of global content and distribution strategy for American Express Global Business Travel, a leading travel agency. “For us, it’s important that we have the right access to content and that we provide cost-effective solutions for our clients. We’ve had years of partnerships with the big U.S. airlines where we have had that ability. So now we’ll see if Southwest steps up.”
Meanwhile, Sabre, another major global distribution provider, was not included in the announcement.
The Southwest Problem
Southwest has been a particular challenge for travel agencies for years, and one that is impossible to ignore considering the airline is the largest domestic carrier in the U.S.
Most travel management companies will say that fragmented, incomplete content is the biggest struggle when it comes to booking with Southwest. While nearly every other major U.S. airline is in all three of the big global distribution providers — Amadeus, Travelport, and Sabre — Southwest has its flight information scattered across multiple channels.
“They had all their content on their website, but then there were bits and pieces of their content on all these other channels,” said Bukowski. “And so if you’re a traveler and you’re going through your online booking tool, or you’re going to an agent and you want to know, ‘Hey, what are my options between Dallas and Chicago?’ That’s something that would take a lot longer to answer with Southwest.”
Southwest’s main channel is SWABIZ, the airline’s business travel site. This is where travelers can find the most comprehensive information about flight schedules and pricing, but it means they have to book directly on the airline’s website. While convenient for the airline, it essentially circumvents the entire global distribution system (GDS), which the major travel agencies base their business on.
Southwest also has content on Sabre, but at an extremely limited level. While agencies can see flight schedules, they do not have access to pricing information. Plus, if they book through Sabre and decide to change or cancel a flight, they must call up the airline directly. The airline in 2007 signed a very limited agreement with Travelport as well.
“We’ve been in Sabre since the 90s but at something called ‘Basic Booking Request’. It’s the lowest level of functionality, and it’s also got very limited content. For whatever reason, we just never put our broader relevant content in the GDS system,” said Dave Harvey, vice president of Southwest Business.
Southwest in 2019 also partnered with several big booking tools, such as Egencia, Deem, and GetThere, to give them a direct connect to Southwest flight information. According to the airline, this is its second biggest channel. But again, this provided travelers with partial information, and it existed outside of the flow of the global distribution system.
All in all, travel agencies found it time-consuming and costly to gather the right information for their customers. Many had to find work-arounds, such as using third-party aggregators like BookingBuilder or TravelFusion.
“I certainly hoped that Southwest would become a full participant in the ecosystem,” Mike Premo, president and CEO of the Airline Reporting Corporation, told Skift.
Premo, who spoke with Southwest’s Harvey at TravelConnect in early October, previously worked at CWT, and remembers how difficult it was to book with the airline.
“I was constantly having to tell my corporate travel management clients that either the content wasn’t available in the global distribution system or that it was going to be expensive for me to service and to process the data, collect the data, et cetera,” he said. “Now to be fair, I think Southwest has been hearing this for a good, probably 30 years.”
In response to the extra cost, many travel agencies eventually implemented high-cost booking fees.
“You’d have to go out and work through Band-Aid solutions to try and get content back into the system,” Bukowski explained. “So about three years ago, we introduced a high-cost booking fee. And so that high-cost booking fee was really meant to address the fragmentation and the cost because of decisions made by the airlines to distribute their content a certain way.”
Now Bukowski hopes many of these problems will go away.
“It has been quite a challenge in the past, and so we’re quite encouraged with the direction that it seems like Southwest is taking,” he said.
A Work In Progress
Southwest’s announcement marks its entrance into the general distribution system, an important step for travel management companies. That said, the changes have not gone live yet, and will likely need tweaking once they do.
“Once the content is actually flowing through the system, we can start testing it and say, ‘Okay, here are the capabilities and content that we expect and here’s what Southwest is delivering, and then we can compare and contrast those two things. That’s step one,” said Bukowski.
Plus after years of having little to no relationship with travel agencies, establishing those relationships will be tough. Southwest has even devoted an entire team to facilitating and managing these new relationships.
“Step two is figuring out what that relationship between Southwest and the agency community is going to look like,” Bukowski added. “Because that’s going to be important for them as well.”
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Tags: american express gbt, arc, corporate travel, ctir, cwt, southwest airlines
Photo credit: A Southwest aircraft takes off from McCarran International Airport in Las Vegas, NV. Tomás del Coro / Flickr