Feature of the Month
GDS on your own terms? Sterling paves the way with new alternatives to traditional GDS using Navitaire
Few low-fare carriers have made the leap to global distribution systems (GDS) since the gap between their simplified, cost-conscious business models and the dated, complex operations and infrastructures of the major GDSs has always seemed too great.
Thanks to Sterling Airlines, that may change in the future. Sterling has created a new alternative to traditional GDS connectivity using Navitaire's application programming interface (API) services.
Sterling is Scandinavia's largest low-fare airline and the fourth largest in Europe. A few months ago, it became one of the first ticketless low-fare airlines to join the giant Amadeus GDS. In a real-life David-versus-Goliath story, Amadeus didn't call the shots - Sterling did. Its success has been called a breakthrough for low-fare carriers who want to enjoy the advantages of GDS use but avoid the extra costs, administrative overhead and loss of control typically associated with GDSs.
"We viewed the cost and complexity of using EDIFACT or Type B messaging and all the other hassles of standard GDS connectivity as costly, archaic and of no value to Sterling," says Michael Hansen, Sterling Vice President for Business Development and IT. "We firmly believe that technology should be an enabler, not an obstacle."
Sterling held firm to that position when Amadeus first approached it about offering its inventory through the Amadeus system. Sterling proposed a fresh approach to GDS connectivity, that Amadeus eventually found compelling, to offer its travel agencies greater content.
Sterling uses Navitaire's Open Skies reservation and distribution system. For several years, Open Skies APIs allowed Sterling to support direct booking with selected travel distributors. To maintain simplicity yet gain access, Sterling told Amadeus it would need to use Navitaire's APIs, together with some middleware developed by Sterling, to connect its GDS - and completely bypass the costly, high-maintenance connec-tivity GDS traditionally requires. This was the only way that Sterling would agree to give it a try.
The result is a win/win situation for both Amadeus and Sterling. For its part, Amadeus discovered an effective method to penetrate the low-fare market on terms low-fare carriers could embrace. Meanwhile, Sterling is enjoying benefits that should go far beyond savings on GDS segment fees. For example, Sterling:
- Expects the new solution to deliver significantly increased bookings from business travelers and inbound traffic
- Eliminates the cost of filing its fares and schedules through industry vendors such as ATPCo and OAG
- Keeps its inventory in sync without AVS messaging
- Avoids third-party re-pricing and audit requirements since Sterling provides all pricing
- Uses Navitaire's Instant Pay functionality, which enables immediate direct payments to Sterling
- Ties the higher booking cost for the channel to the resultant bookings by including the additional cost in the fare quote
Sterling views the new arrangement as breakthrough for it and other low-fare carriers. It gets what it considers the best of both worlds - access to agencies and their customers (e.g., large corporate accounts, large agencies and agents outside Sterling's traditional marketing area) and direct connections that allow it to retain control of its inventory. In the meantime, Sterling can continue to offer special fares to Amadeus agents, and agents can also change or cancel bookings via Sterling's agency Internet site.
Sterling feels confident that doing GDS connectivity on its own terms will help it continue its winning streak as one of Europe's most successful low-fare carriers.