Posted on: Friday, June 17, 2005
High-tech systems may be ticket to air savings
By Mark Skertic
Chicago Tribune
CHICAGO — Every time a passenger buys a plane ticket from a travel agent, the transaction traverses a labyrinth the consumer never sees — one that adds $12 to $13 to the price.
But now several high-tech newcomers promise to modernize the system, promoting sophisticated software and a new way of approaching the business that will reduce costs and allow airlines to potentially save millions of dollars each year.
Among the newcomers is G2 SwitchWorks. Overseeing young programmers filling rows of cubicles is Alex Zoghlin, a one-time U.S. Navy cryptographer who worked on the earliest incarnations of Web browsers while a University of Illinois student.
"If you're going to redo something 30 or 40 years later, you should probably be able to do it a little bit better," he said. "We're cheaper. From my perspective, the price is a function of how much technology has advanced."
Other entrants to the field include Farelogix and ITA Software, companies that say technology can help them drive costs out of a corner of the travel industry that most consumers never see.
Not surprisingly, established ticketing and reservation systems are responding to the new competition. Sabre, Worldspan and Galileo are the nation's largest, promising they can do much more than the newcomers can offer.
They point to complex systems that allow a travel agent to sit in front of a computer screen and book a far-flung itinerary that involves multiple stops across the country or the world.
Sabre, the largest system in the United States, "has a network with more than 100,000 points of sale, desktops for more than 60,000 travel agents that have access to more than 450 carriers, more than 60,000 hoteliers (and) all the rental car companies," said Greg Webb, chief marketing officer.
Zoghlin helped turn the travel industry on its head a few years ago when he was the first employee to join Orbitz. He was one of the architects of a system that travelers embraced.
Now Zoghlin believes his company can do for the travel industry what it did for online bargain-fare hunters.
In addition to being cheaper, he said, his service will make it easy for travel agents and their customers to do tasks that often are frustrating.
"Now, if you try and exchange a ticket, (you've) got to call," he said. "Want a partial ticket refund because you didn't do the last leg of a trip? Good luck. Ever try and apply an unused ticket to a new one? Got to call.
"It goes on and on. There's a laundry list of highly complex transactions that in today's day and age should be totally automated."
Cutting ticket-distribution costs has become a priority. Carriers are operating in an industry in which several carriers are in bankruptcy, and multimillion-dollar quarterly losses are expected.
Agents may seem like they're linked with airlines, but, in fact, they have used giant global reservation and ticket-distribution systems for decades. Online bargain-finding reservation systems like Orbitz and Expedia book through the mainframes, too.
