AA October Revenue Impacted by Bookaway

[eolesen]

Fair enough, but while the employee might have to explain the exception, the choice is still theirs to make. I've never had a carrier forced on me against my will. And having worked with travel agencies quite a bit, that seems to be fairly standard.

Maybe WT or one of the folks who actually buy tickets thru a corporate agency know of examples the other way?

 

[silverbird007]

Every time an airline is in bankruptcy it loses customers, when the bankruptcy is over some will come back some may not, Im sure well lose some corporate customers but give them time some will find a reason to come back. No one airline can be everything for everybody including UA or DL. Convenience and price and dependabilty will always win out. When we get out of bankruptcy we should shake up management and AA will have as good a chance as any other carrier. Maybe a few new business destinations in Asia etc. I talk to passengers in FC and some say AA is still their first choice and they understand the bankruptcy process and not going anywhere. I know we have our problems but so do the other US carriers.

 

[WorldTraveler]

Your alma mater could take a lesson...

except that the data overwhelmingly says that DL employees do not believe they have been singled out or are doing worse off than their peers. And more significantly, even if it did, DL employees have almost entirely chosen to maintain the traditional DL labor-mgmt relationship and not trade it for what other network airlines have.
As DL's profits increase relative to its peers and DL employees gain more and more in profit sharing that their peers are not, it will be harder and harder for labor leaders to convince DL employees that walking away from a model that is providing better salary and job growth than what exists at other airlines will be in the best interests of DL employees.

Granted, there are some corporations who are big enough to negotiate directly with the airlines, but I'd say the lion's share of negotiating for corporate discounts is done by the large agencies (e.g. Amex, BCD, Carlson) on behalf of the airline. That's the model we use -- Amex negotiates most of the agreements, aside from a couple reciprocal deals we have with airlines who also do business with us .

When I go shop for airfare, I consistently have a choice of three or four carriers thru our booking tool, regardless if it is domestic or international. The only time I've seen deliberate attempts to steer traffic to a specific airlines is when the agency isn't meeting their commitment to that particular airline, and they want to keep those discounts in the future.

except that there is a level of companies - largely in NYC and in the largest markets in the US - who are large enough and negotiate fares directly with airlines and obtain discounts that do require compliance with the terms of the contract.

Further, Home Depot and Wal-mart largely do not hold large amounts of inventory that they have to mark down and move... they are savvy enough to order from their suppliers only what they sell and they discount because they have the ability to move huge volumes of merchandise that many suppliers need to be able to move in order to survive... and the suppliers, not Home Depot or Wal-Mart take the risks of producing too much or too little for the market.
The same concept exists in the legacy carrier segment of the airline industry where the largest players can negotiate directly w/ each other and offer a level of service that far exceeds what smaller airlines can do.... that is precisely why US has such a hard time competing with AA, DL, and US - because US doesn't have the breadth of network coverage to offer the level of service that large companies want from their suppliers.

Every time an airline is in bankruptcy it loses customers, when the bankruptcy is over some will come back some may not, Im sure well lose some corporate customers but give them time some will find a reason to come back. No one airline can be everything for everybody including UA or DL. Convenience and price and dependabilty will always win out. When we get out of bankruptcy we should shake up management and AA will have as good a chance as any other carrier. Maybe a few new business destinations in Asia etc. I talk to passengers in FC and some say AA is still their first choice and they understand the bankruptcy process and not going anywhere. I know we have our problems but so do the other US carriers.

yep... because customers are interested in price and reliability but if they find it elsewhere, they have little incentive to stay w/ their current suppliers. BK and operational problems such as what AA and UA have experienced this year are opportunities for customers to look around for what else is available in the market - and you are right, some of those customers won't come back unless AA or UA discount far more aggressively on price or service items - such as the Advantage promotions - or expands their service offerings long-term in order to gain a competitive advantage over other carriers.

 

[Mach85ER]

Case and point: Sabre employees have been prohibited from booking AA for the past two years. That's an interesting problem when you're based in Southlake...

Do the Sabre employees still get non-rev benefits on AA or has that expired?

The Sabre employee code choice still shows up when looking up D1/2/3 charges in RES.

 

[eolesen]

Dunno. If they do, it's probably coming to an end quite soon. It's been 16 years since they were spun off, and AA sold the last of their ownership stake back in 2000. Based on past experience, removing the Sabre employee code from the WR entry would probably cost about $25,000 and require a month of testing...

 

[Kev3188]

Just curious; that seems like a lot of testing to simply remove a booking code. What am I missing?

 

[WorldTraveler]

If fare discounts are generated thru the pricing systems, it should be able to be done instantaneously or certainly within a day... if it is connected to an HR data base, it still should be able to be removed just as fast.

Either way, the notion that it would take AA weeks and tens of thousands of dollars to pull either a travel benefit is way beyond the norm for other pricing actions.

And if Sabre is really that slow in updating negotiated pricing programs (which I doubt) then that might give some insight as to why AA is not more nimble in the marketplace......
AA doesn't make its money from travel industry discounts... it makes its money from revenue passengers and I would certainly hope that AA is as capable as its best competitor in monitoring competitive pricing activity and responding to whatever the pricing team says that AA needs to be competitive with.

 

[eolesen]

It's not as simple as removing a booking code...

AA's nonrev pricing doesn't work thru the FPC or apply normal logic. I wrote the functional requirements for AA's nonrev ticketless system back in 1993, and it was a downright pain in the ass trying to get people to think beyond four-part carbon tickets...

Our group was a proponent of filing private fares and discount codes for nonrevs, and issuing ID tickets (which many airlines outside the US seemed to be doing at the time). But AA ultimately decided they wanted to hang on to the "write your own" mentality that gave us paper Form 45 and Form 543 tickets. Instead of modifying employee and retiree behavior, AA spent about $400,000 in 1992 dollars to build a customized system within Sabre PNR and DCS.

The other problem with Sabre is what we lovingly call spaghetti code... When you have lots of little unique code blocks, you never really know what impact a little change is going to have on the system's stability. What should be a minor change sometimes winds up kicking off a larger problem in an unrelated code block (or even another system altogether) because nobody expected that other code block (or system) to be referencing what gets changed. And back in the 90's, there was a lot less attention to documenting code than there is today. Half the cost of a programming change today is paperwork...

And that is what requires a lot of testing when you change deeply embedded or older code.

It's also why AA will likely just leave the code in place, even after the point where Sabre employees have travel privileges, which in turn contributes towards more spaghetti code.

Had AA been a little more forward looking in 1993, this would have been a simple table update to remove a discount code, and a matter of adding a discontinue date to the private fares...

 

[Kev3188]

Makes sense. Thanks, E.

 

[Mach85ER]

I wrote the functional requirements for AA's nonrev ticketless system back in 1993, and it was a downright pain in the ass trying to get people to think beyond four-part carbon tickets...

jeezzuz, Thank you.

 

[WorldTraveler]

While an interesting tangent regarding the handling of Sabre employee discounts, it really doesn't speak to the core issue of the thread which is AA's financial performance.

In order for AA to successfully emerge from BK and for its employees to have a future that supports growth of salary and benefits to levels comparable to or better than its industry peers, AA must generate revenues at or better than its peers in the industry.

AA had a good six month run of RASM growth that was ahead of the industry but note that AA's RASM growth in several recent months only came on LESS total revenue.

Given that AA is apparently willing to agree to pay levels for the pilots higher than the levels AA originally proposed, revenues have to grow to support those pay levels.

 

[Frank Szabo]

It's not as simple as removing a booking code...

AA's nonrev pricing doesn't work thru the FPC or apply normal logic. I wrote the functional requirements for AA's nonrev ticketless system back in 1993, and it was a downright pain in the ass trying to get people to think beyond four-part carbon tickets...

Our group was a proponent of filing private fares and discount codes for nonrevs, and issuing ID tickets (which many airlines outside the US seemed to be doing at the time). But AA ultimately decided they wanted to hang on to the "write your own" mentality that gave us paper Form 45 and Form 543 tickets. Instead of modifying employee and retiree behavior, AA spent about $400,000 in 1992 dollars to build a customized system within Sabre PNR and DCS.

The other problem with Sabre is what we lovingly call spaghetti code... When you have lots of little unique code blocks, you never really know what impact a little change is going to have on the system's stability. What should be a minor change sometimes winds up kicking off a larger problem in an unrelated code block (or even another system altogether) because nobody expected that other code block (or system) to be referencing what gets changed. And back in the 90's, there was a lot less attention to documenting code than there is today. Half the cost of a programming change today is paperwork...

And that is what requires a lot of testing when you change deeply embedded or older code.

It's also why AA will likely just leave the code in place, even after the point where Sabre employees have travel privileges, which in turn contributes towards more spaghetti code.

Had AA been a little more forward looking in 1993, this would have been a simple table update to remove a discount code, and a matter of adding a discontinue date to the private fares...

What language were you guys using to write this stuff, anyway? From your description of all the little nooks and crannies, I'd suspect COBOL or a derivative.