Amadeus has started to roll out its new fare and pricing tools.
This includes several components: Basic Fare Storage; Fare Quotation, Pricing Engine; Fare-based results search; and Fare+Availability Caching.
Basic Fares and Pricing has been enhanced over the years.
Amadeus was unique when it launched Basic Fares and Pricing in deploying a separate fares and pricing engine using the old Unisys-based systems. This brought more flexibility than the integrated Fares and Pricing tools of the pure IBM TPF-based solutions. Amadeus was therefore able to deploy a more flexible private fare system -- Amadeus Nego -- than the other GDSs, although it was not as functionally differentiated.
In announcing the new platform [pdf] Amadeus says it took a four-year effort. Clearly Amadeus has developed a lot of learning along the way and seem to be putting it to good use.
Fares and Pricing generally is a very imprecise service offering. It is very hard to get things right. The complexity of the solutions are mind- boggling. Implementing the fare rules and then trying to mix and match them to availability has been a long-term problem that for specific itineraries.
Travel Agents were almost always better than automated solutions. However, human agents with these good skills are becoming a relatively rare commodity and of course they don’t scale very well.
The emergence of the Internet in the late 1990s resulted in adaptations of the traditional GDS-based core architecture. Amadeus benefited from its earlier major activity in things like itinerary-based tools. But like its fellow GDS competitors, Amadeus continued through the last decade to adapt rather then re-write the systems. Worldspan (now part of Travelport) partnered with Expedia/Microsoft to develop a new generation of tools that were more in tune with the needs of online travel agency players. Sabre rewrote its fares application system to take it off the TPF host. However, all of them have had mixed fortunes in serving accurate online search results.
The reluctance of the GDSs to fulfill the demands of the OTAs and metasearch players -- or indeed any search-results requirement for even single airline caching systems -- created opportunities for companies like ITA Software to emerge. It is interesting to note that ITA was actually the beneficiary of this reluctance.
Indeed, Amadeus took an 18% shareholding early in ITA’s life, hoping to ensure that if ITA was successful, then it would benefit the core Amadeus platform. However, the relationship never matured and acrimoniously ended a few years ago.
Taking a lot of lessons from its original MasterPricer tool, Amadeus has upgraded it and given it a lot more capability. The new platform has more new names, and Amadeus is doing a great job in creating a degree of confusion. So far, the Master Pricer flavors are as follows: Travelboard, Calendar, Special Offer and Agent Fare Families.
Among the new capabilities:
Master Pricer Standard is being replaced by Master Pricer Travel Board. This is essentially the first implementation of Amadeus’s new fares and pricing platform architecture and any advanced features will only be available from the new platform. New commercial terms apply so it is important for users to ensure that they are going to be able to keep their costs under control for these new options because -- make no mistake --this is not a free upgrade.
In Master Pricer Travel Board the ability to invoke different search parameters is now possible. Amadeus has changed the basic algorithm in the tool to include more user definition, but also to add more price-friendly parameters rather than just availability and trip types alone. This will increase the inclusion of options such as 3-leg and multi-carrier solutions.
Don't assume the tool is completely definable by the user platform. Companies sometimes do this to prevent the user from hurting themselves. It will mean that users will need to undertake a strong degree of experimentation in the new platform.
As noted above, the cost to use the tool will rise, and therefore there will need to perform a cost-benefit analysis to ensure that the engine doesn’t start becoming a cash siphon.
The new capabilities are generic in nature, but just about all Master Pricer users, including OTAs and agents, can benefit from the tool. The new architecture is not entirely customer-serving. There is clearly a desire by Amadeus to reduce some of the wasted transactions and higher-cost items where that cost is not directly recoverable in user fees.
Whether the new platform is better at addressing the vagaries of airline-based point of sale and dynamic availability will be a critical element in determining the quality and ultimately the overall success of the solution.
And, it remains to be seen whether the tool will improve the quality of the results. A constant criticism of the current platform has been inaccurate results being returned with certain taxes and service fees ignored.
The market for the first time is seeing competition from both the traditional GDSs and also the fare tool vendors. ITA is clearly a target here as would Expedia's Best Fares Search if it decides to commercialize it. The new solutions from Everbread and Vayant also become targets.
In general, the trend demonstrates the how important the search process has become to the overall workflow. The user community at large (both traditional and online) now has some real options in GDS and independent solutions. Clearly, the legacy GDSs are feeling the heat from the next gen platform providers such as Farelogix, LUTE and Everbread. The airlines will be wanting to see if this new architecture is airline-friendly or not. If the latter, then you can assume to see a lot of talk about the results being “unsellable.”
The jury will be out for a long time to determine if Amadeus’s new platform does the job.
But make no mistake: Amadeus is in this for the long haul and it is going to do whatever it takes to ensure it has a competitive product. This is going to suck a lot of resources internally.
Can the giant move at the same speed as the new players? That remains to be seen.
Only the market -- provided it is freely allowed to -- will decide.