A David-and-Goliath tale in airline revenue integrity
David Harms, CEO of Airlogica, talks about taking on the GDS giants
David Harms is in a bit of a David-and Goliath situation. His relatively small company, Airlogica, competes with some of the largest and most successful companies in the travel industry — the GDS companies — in the field of billing information data tape audits, the mechanism by which airlines can identify problem areas in GDS bookings.
Yet, he said, “we are very successful at what we do,” serving about 60 airlines around the world.
He attributes that success in large part to Airlogica’s independence. “GDS companies are not incentivized to go to the airlines and say, ‘Oops, we made a mistake.’ It’s taking money out of their own pockets,” Harms said.
“A lot of segments booked in GDSs are not valid,” he said. “You’ll find dozens with wrong minimum connecting times, for example. Airlines are paying for those segments unless they take action.”
Harms said that unless an airline is an Amadeus-hosted carrier, it has no way of retrieving a passenger name record and modifying it to conform to various rules. “We are focused on reducing GDS fees and determining what should and should not be paid,” he said.
In addition to reducing fees, an airline can open inventory for resale. About 30% of the affected seats are resold, Harms said.
There is a lot of money to be saved by the airlines by ensuring revenue integrity, Harms said. Despite efforts by some carriers to increase their direct distribution, travel agencies still book most of the airline tickets in most regions of the world.
In the U.S., even those carriers that have envisioned total direct distribution — JetBlue, for example — have turned to the GDSs for growth in the corporate travel market. “The ticket prices sold through GDSs are much higher,” Harms said.
Airlogica has teamed up with Anari, a Manchester, U.K., company with a corporate data warehouse to create new solutions to ferret out problematic segments. Anari also has some airline products, but Harms said there is “an agreement that we’re in this together, and we don’t compete.”
By linking Airlogica’s Flash Robotic Software with Anari’s data warehouse, booking patterns and abuses can be detected prior to the traveler’s departure.
Airlogica’s Zeus product focuses on the BIDT data helps airlines understand distribution trends and allows management to develop strategies immediately to overcome problem areas. “We have Flash to take action on PNRs and Zeus to analyze billing information,” Harms said. “We put it all together in IRIS – the Integrated Revenue Integrity Solution.”
“It’s a good, solid, unique and advanced solution,” he said. “It’s competitive on all fronts.”
Air Pacific, Fiji’s national carrier, has adopted IRIA. Airlogica is in the process of converting AirBaltic, the Latvian carrier, and it may be close to a deal with an African carrier, Harms said. It also recently made a series of presentations to European carriers.
Harms noted that Amadeus acquired Tucson, Ariz.-based Airline Automation Inc. in 2003 and changed its name to Amadeus Revenue Integrity. Sabre Airline Solutions, meanwhile, acquired Calidris, an Icelandic revenue integrity company, in 2010.
Harms believes IRIS is a superior product to both and has an addition edge: its independence.
Read about Sabre’s new defense in US Airways’ antitrust lawsuit in the Jan. 7 issue of TTU.