Northwest to broaden reach of Web deals

The site will offer Northwest's discounted Web fares to accredited travel agents and give them credit for sales through the airline industry's tracking system. The airline hopes the site will reduce its costs and bring in new customers, said company spokesman Kurt Ebenhoch.

"This will allow travel agents to be able to get the same Web fares that customers can get," Ebenhoch said.

Offline travel agents have steadily lost business to online travel sites such as Expedia and Travelocity and to the airlines' Web sites. The Web fares available to online customers have largely been unavailable offline, making it difficult for traditional travel agents to compete.

Meanwhile, with their industry in a tailspin following last year's terrorist attacks, individual airlines have been looking for ways to slash costs. One area that has drawn increasing attention is the cost of distributing tickets to customers.

Last month, for instance, Delta Airlines announced that it would charge customers extra fees for paper tickets in an attempt to push them to use electronic tickets, which cost Delta comparatively little to issue.

Of even greater concern are the costs charged by ticketing systems such as Galileo and Sabre, which act as intermediaries between the airlines and travel agencies. These ticketing companies, known as global distribution systems (GDS), charge airlines to distribute their tickets to each customer for each leg of a flight.

That cost can total between $12 and $17 of every ticket booked, according to Henry Harteveldt, who covers the online travel industry for Forrester Research. A company such as Northwest can expect to pay $200 million a year in GDS fees. With fare prices down and margins already thin, airlines are looking for any way they can to cut those costs, he said.

"Airlines need to take distribution costs out of the picture," Harteveldt said. "We're seeing the beginnings of a shift in who bears the cost."

Last month, American Airlines launched its own Web site for travel agents, allowing them to book fares directly and bypass the GDSes. American's move followed a similar launch last year by Delta Airlines.

Meanwhile, Orbitz announced last month that it has launched a new system that will eventually allow it to book flights directly into several different airlines' reservation systems, allowing it also to bypass the GDSes and their fees.

Like these other sites, Northwest's will allow it to cut out the GDS fees on sales to travel agents. But Northwest's Web site differs from these other initiatives in that it allows traditional travel agents to track their sales through Airlines Reporting Corp. (ARC), said Ebenhoch.

ARC provides the travel industry's standard way of tracking sales by agencies, allowing agencies to demonstrate how much volume and business they do for particular airlines. ARC does not track sales made to travel agents through consumer travel Web sites or through the airlines' Web sites for travel agents, Ebenhoch said.

Northwest expects its new Web site, called WorldAgent Direct, to launch Oct. 22, Ebenhoch said. The site is currently in beta testing with travel agents. Ebenhoch didn't know how many travel agents are testing the site.

Last week, Expedia pulled Northwest tickets from its search engine after a contract dispute. Northwest has complained that the fees Expedia was proposing would make it Northwest's highest-cost ticket distributor. The issue has not been resolved, Ebenhoch said, adding that while Northwest is open to talks, the companies are not currently discussing the issue.