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Southwest Creates Reservation System After Rivals Give It the Boot

From Reuters

Southwest Airlines Co., the nation’s most profitable carrier, launched its own computer reservation system Wednesday to combat a move by rival carriers to curb travel agent access to the Dallas-based airline.

Southwest, known for no-frills service, has kept costs low partly by refusing to pay fees to major computer reservation systems for displaying its schedule and fares.

But three of the four largest such systems, owned by the nation’s biggest airlines, are seeking to make it harder for travel agents to find information on Southwest and other rivals unless the owners are paid fees for tickets issued. The standard fee is $2.50 per round trip.

Southwest pays half that rate to Sabre, the nation’s largest computer reservation system, but only to show fares and schedules, not other data such as possible connections with other carriers. Sabre, owned by American Airlines’ parent, AMR Corp., is not participating in the action by the three other systems.

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Southwest, which contends its costs would skyrocket if it fully participated in the industry’s major systems, fired back by installing a personal computer system for travel agents who sell at least 15 Southwest tickets a day.

The system, called Southwest Airlines Travel, includes a toll-free telephone line with access to Southwest ticket agents, a modem and a ticket printer.

The airline is also speeding up delivery to travel agents who order fewer than 15 tickets.

Southwest published a full-page letter by Chairman Herbert Kelleher in some newspapers, including The Times, justifying its move.

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“A primary key to Southwest’s success has been our ability to fight the inevitable pressure to increase costs, thus allowing us to keep fares low,” he said.

“We decided more than 20 years ago that paying fees to all of the computer reservations systems owned by our competitors would undermine our commitment to low costs and low fares,” he said.


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