ATW Daily News

ITA Software applies shopping technology to frequent flyer reward redemption

Tuesday January 30, 2007

News from Travel Technology Update: ITA Software, which revolutionized air fare shopping, is applying its shopping technology to a new arena: frequent flyer rewards.

Its first client is Aeroplan, founded as Air Canada's frequent flyer program but spun off as a separate company after the carrier's bankruptcy reorganization.

Andre Hebert, Aeroplan's vice president of IT and eBusiness, said the move was part of a larger project called ClassicPlus, whose goal was "to offer not just more seats for redemption, but every seat on the aircraft."

Typically, carriers set aside a small number of award seats on each flight. "They have one, two or three buckets of redemption seats," said Gianni Marostica, ITA's new chief commercial officer.

Those numbers have shrunk further with capacity cutbacks and high load factors, sometimes putting frequent flyer programs on the list of things generate consumer dissatisfaction with airlines.

Aeroplan, which buys seats from Air Canada, devised a plan to offer every available seat in exchange for varying mileage levels.

"We didn't want to build this on RES III," Air Canada's current reservations system, Hebert said, because it is "not able to find that last seat. Legacy systems have restrictions in the way they look for flights."

ITA Software has "more sophisticated technology" that can come up with many more flight combinations.

In a simple example, Hebert said, a customer might request a Montreal-Paris reward ticket. Air Canada offers nonstops as well as connections through Toronto. The ideal connecting time would be one hour, so an older system would search that combination for available seats, and if the Montreal-Toronto segment was sold out, it would reject the request.

ITA, on the other hand, would search for availability on earlier Montreal-Toronto segments, offering the customer additional options. Legacy systems were not programmed to go "that far, that deep," Hebert said.

He noted that Aeroplan's status as a separate company has empowered it to do things an airline-owned program might not consider.

"We were fortunate to be first ones out there," he said.

"Loyalty is our business. We are building systems, investing in technology and taking it to a level that would not have been allowed" under airline ownership. "The amount of functionality on the Web site is way up there."

Independence also puts Aeroplan in a different mindset: "Contrary to other frequent flyer programs, for us the redemption of a seat is a good thing," Hebert said.

ITA Software also is developing new reservations and passenger management systems for Air Canada.

"Air Canada's decision made ours easier," Hebert said, but even if the airline had made a different choice, "we would have gone with ITA anyway."

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