Re : Provision of Functionality of Validation of Ticketing Time Limits within a PNR

Dear Sir,

I am writing to you in my capacity as chairman of A.R.I.G. ( Airline Revenue Integrity Group ) on behalf of our airline membership, which currently consists of more than 60 of the World’s leading airlines, the leading Revenue Integrity software suppliers and two GDSs (Sabre and Amadeus).

A.R.I.G. is an independent group consisting or airlines which recognise and share a common problem of revenue leakage. This originates from abusage of their passenger inventory by travel agents predominately ( and some passengers). Apart from the loss of potential revenue resulting from no-show passengers or late cancellations, airlines also suffer a further cost and hence revenue loss arising from costs incurred from GDS charges for these bookings which fail to produce any revenue.

In the current difficult times for the airline industry, it is essential that carriers realise all the revenue from each sale and avoid any unnecessary revenue leakage. Revenue can be lost when a booking is made and then not used, thus denying the seat to another passenger and the carrier loses a sales opportunity. Although overbooking is one of the solutions used by carriers to combat these problems, it inevitably carries risks and produces additional cost so is not the ideal solution.

The concept of protecting an airline's revenue from leakage is an issue that is well recognised across the industry and has resulted in several system solutions, developed internally by the airlines or by third-party providers, to partially remedy this industry problem. Two solution providers have recently been purchased by two of the GDSs (Sabre and Amadeus) as yet another useful revenue stream, rather than as a free service to lessen the impact of a booking process that is not robust. The acquisition, implementation and maintenance of these solutions adds yet further costs to a carrier in attempting to rectify or minimise the effects of GDS bookings that should be but aren’t robust at the time of creation.

A.R.I.G. has agreed that the ideal solution for both airlines and travel agents to this problem would be to have validation of the Ticketing Time Limit (contained in the Fare Rule) built into the GDS software. The attraction of this solution is that behaviours in the marketplace are then focussed on best practice, which is to the advantage of everyone involved, the paying customer, the airline, the agent and the GDS themselves. A.R.I.G believe that the validation functionality should be provided in such a way that the GDSs link the validation to the Fare Rules data, so that individual carriers can maintain the integrity of their own data and processes. Due to legal constraints it is not possible for carriers to discuss a common format or policy.

This solution requires first to make a price mandatory for each booking as it is today done on any internet sale site. As airlines do not sell a seat but a product with a price and conditions, this mandatory fare quote will develop the transparency for the customer.

At the last ARIG conference, the carriers felt strongly that they entrust the GDS with their most precious commodity, namely their inventory of seats and look to the GDS to provide a responsible solution to this issue, quickly.

We are aware that development work is underway at some of the GDS, but feel there needs to be greater urgency to provide an industry solution. ARIG members are very keen to see this functionality delivered as soon as possible as we believe there are significant benefits to be achieved at a crucial time for the industry.

I look forward to receiving your views on this in the near future, which I can then distribute to our members and display on our ARIG website (www.arigroup.org) in the secure pages, subject to your agreement. Might I request that you reply to this letter by 30 September 2005 indicating your thoughts? If there are any solutions proposed for future delivery that would remedy any of the above described problems, then can you supply a timeline to these solutions? We next meet in the autumn in Las Vegas and any representatives from your organisation are more than welcome to attend and present on any solutions that you are able to offer.

Many thanks for your time in dealing with this important issue for our A.R.I.G. members.

Yours faithfully,

Paul Rose, A.R.I.G. Chairman.