Airline Reservations

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Airline Reservations

Airline reservation systems originated in the mid-1950s as relatively unsophisticated internal systems to help with tasks such as seat assignments, maintenance scheduling, and aircraft loading. Modern airline reservation systems are multi-faceted, full-service systems that assist with a variety of airline management tasks and service customer needs from the time of initial reservation through completion of the flight

First Computerized Systems

American Airlines, an early pioneer in the use of commercial computer technology, developed a semi-automated customer reservation system called Reservisor by 1960. It required considerable manual intervention and had a reservation error rate of eight percent, which was the lowest in the industry at the time. Recognizing that semi-automatic systems would not be capableof handling the rapidly increasing demand for air travel, American Airlines had already begun working with IBM, in the late 1950s, to develop the first automated, online, real-time computerized reservation system (CRS). The joint project would use interactive, real-time computing technology developed for a U.S. government air defense project referred to as Semi-Automatic Ground Environment (SAGE).

Airline ticket agents access computerized reservation systems to make flight arrangements, view current reservations, and check passenger lists, among other things. Secure and stable systems are vital to the airline industry.

In 1964 the Semi-Automated Business Research Environment (Sabre) System was introduced. Sabre, a coast-to-coast telecommunications network, was the largest, private, online, real-time data processing system in the United States. Only the U.S. government had a larger working system. Most of the computing systems that existed in the 1960s were batch processing systems, but Sabre was an early example of a transaction processing system. It modified the content of the large databases containing flight and passenger information as a direct result of information entered directly from data terminals. For the first time, an airline was able to track passenger names on all connections of their flights.

In the early years, American Airlines invested more than $350 million in this project, with $40 million spent for initial development. By comparison, a new jet cost $4.5 million during this time period. The immediate impact of the Sabre System implementation was a reduction in the reservation error rate to less than one percent, and a 30 percent savings on investment in personnel.

After investing $250 million in system development, United Airlines entered the CRS market in 1976 with the Apollo Reservation System. Other well-known traditional reservation systems originally developed by individual airlines include Worldspan LP, Galileo International Inc., which purchased Apollo in May 1997, and European competitor Amadeus Global Travel Distribution SA.

In 1976 Sabre and Apollo began placing their computerized reservation systems in travel agencies. Through office automation offered by the systems, travel agents could print both tickets and boarding passes for their customers. Travel agents were transformed into an extension of the airline industry, which significantly streamlined the ticketing process.

Expanding Reservations Services

Following deregulation of the airline industry in 1978, the major computerized reservation systems such as Sabre and Apollo began listing airline reservations for all competing major carriers as well as for their host airlines. This networked a large number of travel agents with the major airlines and yielded a very profitable per ticket booking fee for the host airline.

Accusations of favoritism toward the host airline, based on the order in which available flights were listed on terminal screens, surfaced early in the 1980s. Since studies reveal that 90 percent of flights are booked from the first reservation screen, a favorable position can dramatically affect ticket sales. The U.S. Department of Transportation investigated this allegation and issued a ruling to prohibit favoritism toward the host airline by requiring that flight information be presented in a neutral order. Because of the prohibitive cost of developing their own computerized reservation systems, the airlines ultimately agreed to pay the per ticket booking fee to the majorcomputerized reservations providers, and a code-sharing scheme was developed to help alleviate the screen order bias. Sabre, one of the most widely recognized information systems ever developed, was spun off as a private company by AMR Corporation in 2000.

Full-Service Travel Management

Computerized reservation systems have grown in sophistication and are able to offer customer services such as electronic tickets, wireless database access, hotel room reservations, rental car reservations, frequent flyer program mileage, and provision for special meal requests. The systems also provide airline management assistance by addressing financial, administrative, and staffing issues. These include crew management, flight operations, planning and scheduling airplane maintenance, loading aircraft to maintain balance, baggage tracking, decision support for control of overbooking, discount seat allocations, and yield management programs that dynamically adjust the number of special fare seats based on the number of reservations.

Enhancements are made to computerized reservation systems with the understanding that interruptions in service are not acceptable. To be successful, a reservation system must be reliable with a very low failure rate. Hardware and software redundancy for immediate backup in the event of a failure is an absolute necessity.

Impact of the Internet

In the mid-1990s an increasing number of consumers began purchasing airline tickets and other travel needs online. To meet rising customer interest in booking online air travel reservations, computerized reservation systems have evolved into convenient, user-friendly systems that are available via the Internet twenty-four hours per day. The long-established computerized reservation systems are experiencing a gradual technology migration away from traditional mainframe -based systems and large databases in favor of client server systems with effective web-based interfaces. Search results that previously required an individual to interpret complex codes are now presented in straightforward, easy to understand notations.

In 1996 Sabre launched Travelocity.com, the first of the major comprehensive Internet travel sites. Travelocity.com and other systems, such as Expedia.com, allow consumers to gather information about flights using search criteria such as airline, lowest price, shortest flight, and departure and arrival times. Many airlines offer their own online ticket purchasing services. Also joining in the quest for online reservations is an airline collaborative called Orbitz.com, sponsored by American, United, Delta, Northwest, and Continental Airlines. Many online systems also allow for selection of hotels, rental cars, and other travel necessities.

The wealth of customer data collected by these systems is used to target marketing and incentive programs that appeal to specific consumer interests. Internet-based systems offer many of the capabilities of the traditional computerized reservation systems, but in a customer-friendly format that is easy to use and understand.

Thomas A. Pollack