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RESERVATION
SYSTEMS
By:
David J. Wardell
July, 1991
NOTICE
This document is proprietary and confidential. It may not be copied or reproduced either
photographically, photomechanically, or electronically. It may also not be quoted or
referenced in other documents, presentations, studies, papers, or symposia without
express, prior, written consent.
DAVID J. WARDELL
Airline computerized reservation systems (CRS) are the primary form of travel agency
computerization in the world. These systems manage the millions of reservation requests
and cancellations, fare, and reservation pricing requests1 that are initiated by travel
agencies using these systems—not to mention the thousands of database changes that
occur daily. The CRS function as extremely powerful and valuable distribution and
marketing tools for their airline owners. Today's travel agency competitive environment
is largely defined and controlled by airline CRS.
This report describes:
Airline reservation and distribution systems
CRS processing and communication concepts
Relationships between CRS and other industry components
CRS and airline competitive strategies, as these pertain to reservation technology
Non-reservation systems that interconnect with airline CRS
Profiles of the major international airline CRS
1
Pricing in this sense refers to the application of fares, as contained in a fare database and as
specified by a rule database to specific itineraries as reserved by a traveler. Thus a travel agent will
make a reservation and price the itinerary—yielding a total fare, or price, for all segments within
the passenger's itinerary, when considered as a whole.
This is significant as airline reservations are frequently flight or itinerary-specific. For example,
fares between destinations A and B maybe lower if the passenger travels round-trip, if a certain
flight is used that the airlines desires to promote, or if flights with intermediate stops (as opposed
to non-stop flights) are used.
Fare databases are used to quote rates based upon passenger inquiries, but only a complete
itinerary price is used to issue a ticket and is guaranteed to the traveler.
2
Dealerships as understood herein are distributors that re pr ese nt t he pr im ar y inte rests of a
s in g le pr inc ip a l o r sma ll group of principals (vendors) to the overall detriment of
other vendors. The dealership may or may not effectively meet the needs of its
customers, depending upon the precise nature of its business practices.
Dealerships are typically thought of as automobile distributors or appliance stores.
Travel dealerships are looser and are rarely, if ever, identified as such publicly. The
airline vendor's relationship with its dealers allows significant benefits to accrue to the
enfranchising principal, regardless of how the relationship is described.
3
KLM is the world's oldest airline still operating under its own name, and the Amsterdam - London
route is the world's oldest air route.
4
Aviation “firsts” are always subjects of considerable discussion. While some airlines put their
beginnings prior to 1920, they carried mail, and not passengers. May 17, 1920 is used by most
sources as the beginning of scheduled, passenger transportation.
5
Fares are charges that apply for passengers between a specific origin and destination point, using
a specific class of service and a particular routing, as determined by the carrier.
In earlier times, fares were tied to distances traveled more closely than they are today. Now,
promotional and yield management considerations make it very difficult to project or establish
fares based upon distance alone. Outside the U.S., airlines often operate in regulated
environments, where prices are fixed by international agreements or government decision, rather
than by competition.
This occasionally results in considerable consternation on the part of travelers and consumer
groups, as these fare and pricing inequities are difficult to justify when examined outside the
larger airline pricing context.
Two of the world’s busiest air routes - London to Paris, and New York to Washington, DC- are both
around 220 miles. An unrestricted London-Paris ticket as of this writing (Fall, 1990) is £88 ($172),
whether the customer flies British Airways or Air France, whereas the price of a New York
Washington shuttle ticket is $129 (The Economist, 1989).
6
Some travel agencies perform a financial function, in that they organize payments on behalf of
business travel purchasers and issue consolidated statements and invoices for tickets purchased.
This can also be a credit or cash management function, if the travel agency does not require either
payment on delivery or payment through a charge card with ticket issuance.
In either case, this is a minor part of any value-added by the travel agency to its business travel
customers.
7
Although “hard-copy” reservations management is more common in the hotel industry, many
substantive airline operations, operate in a primarily manual mode. These often use CRS inventory
displays for communicating sales made to a central facility, where the actual database resides in
manual form. This is one illustration of the absolute necessity of CRS as distribution tools, if not
inventory management tools.
8
BOAC (later consolidated with British Airways) began transatlantic service from New York to
London October 4, 1958. National Airlines (later purchased by Pan American World Airways)
began domestic U.S. service from New York to Miami December 10, 1958.
9
Telegraphy has a long history in the travel industry and is still an integral part of data
communications for many suppliers (as discussed later in this chapter). The term telegraphy
describes a telecommunication system whereby graphic symbols (using a small character set of
letters, numerals, and a few special control characters) are transmitted using a signal code that
describes each character so transmitted individually.
Frequently the 5-bit Baudot encoding system (from which the term “baud” is derived) is used,
particularly in print-based teletypewriter machines. Data processing (non-print media) telegraphy
can use any number of encoding systems, the essential quality being representation of discrete
characters by specific codes without intermediate states or gradation.
Teletype is the trademark of the Teletype Corporation for their teletypewriter devices.
10
(Software Magazine, 1989)
11
These included electrostatic storage, which was insufficiently reliable for most applications;
mercury delay line storage, a very slow (on the order of 500ms, or about 50 times greater than
1990-era storage media) system used only by UNIVAC; magnetic drum storage, widely used but
also slow; and magnetic core, the most successful process for both commercial and scientific
applications.
12
During these years, LSI or Large-Scale Integration devices were produced. These are similar to
the VLSI or Very Large-Scale Integration devices (broadly defined as a device containing more than
10,000 transistors on a single circuit) used in today’s circuits, but on a less sophisticated level.
13
It is interesting to note that integrated circuitry, although pioneered in the late 1950s and
commercially available as early as 1961, was helped immeasurably on the road to wide acceptance
and practicality by the early U.S. space program.
14
International Business Machines, then, as today, manufacturers of the most successful, highly
reliable, commercial data processing devices and operating systems.
15
Now merged with Burroughs to form Unisys.
16
Semi-Automated Business Research Environment
17
(Software Magazine, op. cit.)
18
Eastern PARS is distinct from the proprietary airline CRS developed and market by TWA, and
which is now part of Worldspan, in partnership with Northwest Airlines and Delta Airlines.
Although the platform used by TWA developed from IBM/Eastern PARS, the CRS is a distinct
product with its own pedigree.
19
Trans World Airlines (TWA) has a similar development project with Burroughs, and United
Airlines worked with Univac (both Burroughs and Univac are now part of Unisys). Although
Univac did finally implement a somewhat successful reservation system, which was used into the
1980s by airlines such as Northwest Orient, the initial United Airlines effort was abandoned.
20
The era where long distance telephone communication was routine really did not arrive until the
1970s. Although nationwide direct dial service had existed for many years previously, line
conditions were poor and rates high by today’s standards. The public generally limited long
distance telephone conversations to unusual circumstances. Although reliance upon the telephone
was more common in business, written correspondence still played a more prominent role in the
conduct of long distance business than is true today.
The extensive commoditization of telephone communications was brought about by the gradual
deregulation of long distance services, and subsequent lowering of rates, beginning in the early
1980s, and the introduction of more advanced telecommunication technology, such as facsimile
machines (FAX) in the mid 1980s.
21
Interline refers to tickets (or ticket-related transactions such as reservations) issued by one
airline on beha1f of another. This is done because airline schedules often require coordination with
other carriers in order to fulfill customer needs. Thus, a traveler flying from Portland, Oregon to
London, UK must change planes at some intermediate city because there is no direct service.
The traveler’s itinerary might involve United Airlines between Portland and Seattle, Washington,
then British Airways from Seattle, non-stop to London. Only a single airline ticket would be issued
that would contain two valid flight coupons—one for the United flight and another for British
Airways. The traveler would also probably pay a single price, which would be divided between the
two airlines based upon formulas agreed to by the airlines involved. The passenger’s reservation
and ticket could be issued by either United Airlines or British Airways, because of the interline
agreements in place between them.
The overall effect is to simplify the transaction for the traveler and any travel agent that would
issue the ticket on behalf of the airlines involved.
22
Telephoning is very common in the travel industry, as some airlines do not make reliable
inventory information available to “offline” systems; others are not automated at all. Telephone
calls for reservations routinely take several minutes at best, and can take much longer, if the
reservation center called is busy or telephone communications are unreliable. This contrasts with
electronic inventory sale messages which the operator completes in a few seconds.
23
These are detailed in the publication: Reservations Interline Message Procedures -- Passenger
(ARIMP), current edition, Montreal: International Air Transport Association.
24
Univac played a large role in this development.
25
Partly this was doubtless because a comparatively “low-tech” approach to meeting the
communications needs of the embryonic worldwide airline systems industry, where all phases of
communications technology were underdeveloped and not completely reliable, was deemed more
appropriate.
It is also partly true that the right applications and designs were simply not made available to the
right airline system designers at the right time.
26
There are numerous other programmer tools that make the production of machine instructions
easier and more reliable. Most rely upon close interaction with a processor of some type, so that
the programmer gains real experience as the work progresses.
An illustration is Microsoft’s excellent PC-based Quick-BASIC programming environment. Here
programmers use an online screen editor to create their code, assisted by online help files and
self-editing features that identify potential errors as they are made. Programs, parts of programs,
or even individual steps can be tested at will through an emulation feature that avoids the
“compile” step and demonstrates what the final product will actually do on the host computer.
27
To illustrate, the first computer the author, used was an IBM 360/20 that had 48k of magnetic
core memory and very few peripheral devices. Contrast this with today’s PC which is routinely
equipped with at least 640k of semiconductor memory, a CRT, and numerous peripherals.
28
Sometimes, depending upon the type of assembly language used, a program called an
assembler is used to translate certain parts of the program into a form suitable for the computer.
29
Fortran (1958), Cobol (1960), and Algol (1960) are examples of several that are still used (with
ongoing revisions and refinements) today.
30
This, in part, accounts for American’s decision to migrate to a “pure” TPF environment—a
project undertaken with significant expense and risk. SABRE’s access to product enhancements
and IBM support is thereby significantly enhanced. Further, the programming upgrades introduced
into TPF promise to make it a much more productive environment. These advantages were not
available to hybrid systems.
31
Native Mode usually refers to a computer operating environment that is specific to a particular
type of machine, within which applications can be run without the need for interpreters or
specialized operating environments that are foreign to the machine in question.
32
Uniprocessing means that instructions are executed by the processor sequentially, as opposed
to multiprocessing, where several processors function in parallel, executing coordinated
instructions.
TWA’s system has about 50,000 communication terminals in the field worldwide. The size of the database is about 850 gb (two to
the thirtieth power; significant storage for its day) and is stored on 340 of 3380s DADS. It is fully duplicated for performance and
availability reasons. About 8% of 850 gb are occupied by passenger records.
A typical daily workload is about 20 million transactions. The peak performance rate is about 800 TPS.
The average rate is 552 TPS with a response time of 1.5 second.
Reliability of these systems is also an important parameter. A partial database recovery (recovery from transaction or system
program failure) takes about two minutes. A cold start (total failure or starting system from scratch)takes about eight hours. In
1972, TWA lost about $2 million and in 1976 about $250,000 due to system unavailability. However, the airline has improved its
software reliability and did not have a major system outage for the last two years.
Initially, it had a 9083 CPR that ran on a 3083 uniprocessors. Since then, it has gone to multiprocessors (3390), four of which are
dedicated to on-line processing. TWA can accommodate up to eight processors that might give it adequate power to reach 1,000
TPS
By comparison, SABRE, the largest system in used by travel agents today, currently
operates its Passenger Service System, one of five major divisions of SABRE, on 6 IBM
3090/200 series machines and 224 IBM 380 disk drives. Each drive has approximately
1,320 mb, giving the system a total storage capacity of 296 gb per volume. Current
memory is 726 gb.
SABRE has announced figures of over 1,800 transactions processed per second during
exceptional peak periods, and anticipates 2,200 or more in the future.
33
Although American’s implementation of mainstream technology is a significant and correct
strategic step, it is debatable whether the new environment provides as much high-volume
transaction processing flexibility and capability as did American’s hybrid ACP/TPF system
While a detailed discussion of this question is beyond the scope of this text, it is well to remember
that American’s decision was a strategic move, undertaken for reasons apart from pure transaction
processing capability.
34
Per Vijay Kumar (Kumar, 1990). Vijay Kumar is an assistant professor of computer science at the
University of Missouri—Kansas City. His research areas are distributed systems, object oriented
and expert database systems. Copyright Association for Systems Management 1990, used by
permission. This material is based upon (Gilford & Spector, 1984) and (Buckley, 1989).
35
Most CRS highly subsidize user (travel agency in the main) hardware and software. Rea1 CRS
revenue is obtained through transaction fees charged to vendors. There is a complex relationship
management challenge facing not only the CRS but others who would use the CRS as a value-
added network. This is a fundamental premise that is usually overlooked by would-be CRS
application developers.
36
By far the majority of transaction-based systems produced today, regardless, of application, are
online systems.
37
Essentially meaning the time a transaction takes from its initiation to completion—including
manual and computerized steps and processes.
38
In this sense, an individual user’s interaction with the system in order to accomplish a specific
purpose (such as make a reservation for a passenger) is termed a session. A session might include
dozens of transactions and database queries, all of which would come together in the completed
passenger’s reservation.
39
A real-time application delivers a response during the time that the application is physically
running on the computer, so that the process can receive interaction from the user and be directed
accordingly. In airline reservation applications, for instance, requesting flight availability is an
interactive, real time application because the user determines specific parameters and modifiers
that are used to deliver “correct” flights, making the decisions as to what modifiers to use while
interacting with the system.
40
There are CRS databases that are used for internal MIS or other purposes not essential to system
operation. These may not have continuous availability.
41
A good example is the electronic filing of passenger reservations that have been coded to be
ticketed on a certain date. This typically occurs overnight, when system usage is at a minimum.
42
1.5 seconds is the standard for most responses using SABRE. In other words, a user receives a
response to any entry made within this time. The sole exception is the complex “best fare” pricing
program, designed to locate the lowest air fare for a particular itinerary, which can take
approximately 5 seconds.
Users are very conscious of system responsiveness and routinely complain if even a few seconds
are added to familiar response times.
43
This is part of the reason assembly language programming, which is intrinsically faster than
many (not all) high-level compiled object programs, is used extensively in airline CRS.
44
This means that there may be inaccuracies in the database, but these must not be planned or
intentional. The system cannot assume that some inaccuracy or old data is tolerable.
45
CRS do contain “non-essential” data that do not fit this definition. For instance, there are text-
based reference pages in every PARS-type CRS that contain general information of definite value
to system users but not essential to, or directly involved with, transaction creation or update.
46
“The Bank of America plans to use TPF as the basis for a high-volume transaction processor
front-end using IMS as the back-end system, and is also planning to enhance the power and
capability of TPF.”
(Kumar, 1990). Note: IMS or Information Management System is an IBM database support
product.)
In this same article, the author expresses the opinion, “In its present form, however, it (TPF) does
not offer a solution to transaction processing problems.” It is correct that TPF does not offer a
comprehensive solution to the range of difficulties associated with transaction processing, and its
longevity (at least in present forms) may be questioned, but the large, high-volume, successful TPF
operations in place today are sufficient testimony of its value as a transaction processing tool.
47
The Civil Aeronautics Board, a U.S. federal governmental airline regulatory body dissolved as
part of the Airline Deregulation Act of 1978. Many of its functions are now assumed by the
Department of Transportation; others by the Justice Department.
48
The Association of Retail Travel Agents, an industry group that limits its membership to
businesses actively involved with the sale of travel to the public at a retail level.
49
In the same talk, Cohen stated:
“The technical capabilities of today’s computerized systems reflects the old regulated
industry and they (the airlines/CRS) must adjust to the new, competitive regime.”
What, at the time, was mistaken for technological limitations was really an unavoidable
consequence of deregulation. This is so because the most challenging CRS consequence of
deregulation is database maintenance, which is hampered by significant, nontechnological,
limitations. There have been significant pricing and fare-search tools developed for the major CRS,
but the fundamental database problem remains and has not changed significantly, although the
trave1 agent’s and the public’s ability to deal with the problem have improved greatly.
50
This is because the transaction load experienced by today’s CRS, based upon their broad travel
agency user bases, could not be accommodated by systems of that vintage.
51
Excerpted from a four-part series, The Right Decision for the Right Reason (Wardell, 1982),
published in The Travel Agent. Copyright 1982 by David J. Wardell. All rights reserved.
52
This is costs refers specifically to airline City Ticket Offices (CTOs), which are storefront
1ocations handling ticket sales much as a retail travel agency does. Airport processing costs were
somewhat less. Ticket-by-mail programs, never universally adopted by airlines, have consistently
represented the most cost-effective distribution mechanism, but cannot meet the needs of high-
volume business accounts and are also unattractive as some risk must be assumed where tickets
are sent through the mail.
53
The federal transportation tax is currently 10%, making the airline’s effective commission rate
9%.
54
Air Traffic Conference of America. An airline industry cartel that set standards (both commercial
and technological) for relationships between airlines and travel agencies, and policed these
relationships.
55
Radio Corporation of America, a pioneer in the electronics industry; merged with General
Electric in 1986.
56
Which was minimal because the teletypewriter machines used by RCA were extremely rugged
and reliable; later machines from other suppliers had more problems.
57
Airlines sponsoring teleticket machines varied based upon the carriers represented in various
markets. Where one airline was stronger than others it usually took responsibility for installing the
machines in select agencies.
58
The Trans World Airlines and United Airlines reservation system experiments were discontinued
in 1973, while American Airlines continued to maintain equipment in some large agencies.
59
AMTRAK schedules, availability, reservations, and ticketing are offered by the major U.S. CRS.
There are projects underway to make similar services available for European rail services and
ferries, but none has thus far been finalized.
According to John Desmond (Desmond, 1989), Writing in Software Magazine and quoting Max
Hopper, Senior Vice President for information systems at American Airlines:
“The effort to include the trains and ferries of Europe into the reservation systems is a
massive, continuing project. But it is essential to compete in Europe, because so much
travel in that market uses multiple modes. He (Hopper) indicated the situation is analogous
to the 1960s in the U.S., when airline transfers prolonged the minimum two hours
necessary to make a reservation.”
60
Indeed, the concept of a travel agency CRS was not well-defined at that time.
61
Multi-Access Airline Reservation System. Multi-access is discussed in more detail in the
connectivity section of this chapter.
American Airlines and United Airlines began aggressively marketing SABRE and Apollo,
their respective CRS, at this time. Their stated intentions were to invest in travel agency
automation to the extent necessary to establish automated distribution networks
nationally. Both corporations allocated millions of dollars to the project. TWA also
actively marketed PARS at this time, but more on a regional basis.
These three systems were sophisticated travel agency-oriented reservation tools, for the
time, and were free of many limitations that faced earlier efforts. A number of other
airlines, among them Western Airlines (now merged with Delta Airlines), Allegheny
Airlines (now US Air) and Alaska Airlines, offered reservation products to selected
agencies within their primary markets. These were far less sophisticated than SABRE,
Apollo, or PARS and were quickly eclipsed by the superior products.
Demand for CRS automation far outstripped the suppliers’ ability to install and support
the systems, so the largest agencies were selected to receive systems first. Smaller
62
Multi-Access Reservation System.
63
SystemOne Direct Access.
64
It is interesting to note that some of the first CRS installed nationally were placed in commercial
accounts (corporations with large travel volumes and in-house travel arrangers), rather than in
travel agencies. This was also true for many of the first teleticket machines.
65
One way this is said to be done is through manipulation of display algorithms and flight times.
66
This fact is clearly demonstrable in medium and largersized computer installations. A complete
power-down for many large computer centers would create problems of near disaster proportions.
The effect is far less clear with small systems. In the authors opinion, regular power-downs of
small computers is not harmful and probably prolongs equipment life for two main reasons: (1)
Small computer mechanical devices, such as hard disk drives in particular, are far less robust than
those designed for larger systems and suffer due to extended wear; (2) Office (and home) power
conditions are not nearly as well conditioned as are large data centers, which makes office
systems much more vulnerable to power surges and other anomalies if they are left running
unattended for long periods.
67
SABRE uses 4-character PCCs; other CRS use three.
68
Termed “The Triple A.”
69
“Simultaneous changes to PNR.”
70
Passengers may be unhappy if reservations during peak periods of demand are canceled, for
instance. A complete “history” file makes it possible for the agent to inform the passenger of the
date, time, and individual who authorized the change, thus relieving the airline or other CRS user
from responsibility for unsatisfactory reservation changes.
71
These displays are updated frequently—usually several times daily. Some CRS have weather
information systems that operate independently from DRS.
72
More than 4 seats could be “requested.” This means that the agent could initiate the transaction
and wait for a teletype writer message from the airline in question to verify that the number of
seats required had been reserved. In such cases, reservation confirmation is not automatic.
73
Outside the U.S., coach class is referred to as economy class.
74
Business Class is a compromise between first class and coach or economy class. It lacks the full
set of in-flight amenities found in first class, but is still a grade above coach. It is intended to
appear to business travelers where budgets may not tolerate first class fares, but where a
comparatively modest fare differential for business class may be acceptable.
Business class seating is very popular on international flights, where long distances make the extra
amenities attractive.
75
This process is fairly imperfect at present and, even where properly formatted and entered,
frequent traveler number transmission is notoriously flawed.
76
This reflects the commodity nature of the car rental product, as perceived by the CRS. In other
words, one car is pretty much like another, there is little substantive information that can be
passed by the CRS to the user about specific car-types, so the important information becomes type
and availability only.
77
Agencies issue airline tickets and deduct their commissions when tickets are issued. Car rentals
are not generally pre paid, hence this system is impractical and commissions must be remitted
once final charges have been established.
Commission payments are a major source of travel frustration, as many vendors are extremely
careless about and accurate commission payment, while others simply ignore agency
commissions due entirely.
78
These programs are quite pervasive in the industry, to the effect that most car rental business is
covered by a discount program of some sort.
79
The main limitation of the training environment for travel agents is that tickets cannot be printed
unless a completed PNR is on file. Reservations created by the training environment cannot be
used to simulate ticketing because they never leave the AAA.
80
U.S. airline CRS were among the first extensive users of online simulation and training systems.
81
Systems Network Architecture. The IBM data communication standard, widely implemented in
the computer industry, which describes the relationship between IBM’s virtual telecommunication
access method and the network control program.
82
Bisync or Bisynchronous transmission is a standard used for controlling synchronous data
transmissions. The Bisync standard specifies message format and line protocol.
83
This process obviously requires that complete passenger name and other data be present in the
AAA before a car reservation is initiated. If these data are not present the direct access connection
fails and the system reverts to standard communication methods.
Contribution to PARS/
End Year APOLLO SABRE Worldspan SystemOne
Airline Earnings
1984 106.6% 128.2% 63.9% 144.4%
BO% of bias & 1986 108.9% 129.5% 75.2% 137.2%
halo revenue (a)
1992 109.6% 129.7% 91.9% 145.0%
84
Some travel agencies elect to use two (sometimes more) CRS within their organizations in an
attempt to preserve optimal relationships with several airline marketing organizations. While the
commercial reasons for such a course can be appreciated, the agency suffers obvious lapses in
productivity and management control (which most can ill-afford), while the CRS receives far less
benefit from placing the system that would otherwise be the case.
Airline dealership and distribution strategies are greatly complicated by the fact that
standard motivational and control methods do not apply. Not only do agency dynamics
not lend themselves to most traditional structures, but, as the figure illustrates, no
80%/20% seller-volume ratio, common to so many industries, applies.
By far the majority of agencies (96.50%) generate the bulk of agency-based ticket sales in
the U.S. (62.31%).
The development of CRS has signified a developmental condition far more significant
than computer technology alone. Although technology is the focal point, and there are
certain rationale for maintaining access and domination over as large a block of data as
possible for planning and intelligence-gathering purposes, major carrier marketing
strategies are definitively stratified in their approach to agency marketing.
This permits the carrier to dominate and reap incremental benefits not only from the
broad mass of smaller agencies through the “halo” effects associated with CRS, but also
to exercise tighter and more specific control over key distributors in major markets.
A critical part of this strategy is the overall marketing and competitive profile of the CRS
vendor. Dealership strategies, particularly those focusing upon incremental benefits that
accrue from many agencies, are successful because the five CRS vendors individually
constitute the largest carriers in the United States as well as the most aggressive
85
No agency could operate in the United States without the ability to represent all carriers.
David J.
Digitally signed by David J.
Wardell
DN: cn=David J. Wardell,
o=Technical Reality, ou,
Wardell
email=david@wardell.org,
c=US
Date: 2011.05.27 16:25:58
-04'00'