Date: June 17th 2010

PRESS STATEMENT

For Immediate Release

Corporations And TMCs Asked To Make A False Choice Regarding Accessing Airline Content

June 17, 2010, RADNOR, PA - Business Travel Coalition (BTC) today responded with concern over news reports regarding American Airlines’ bundling of services targeting business travelers including pre-boarding, flexible standby and discounts on change fees that will only be available on the airline’s website, or if travel management companies (TMCs) make the investments of time and money to work with the carrier’s so-called direct-connect program. This important content will apparently not be available to corporate travel managers in their distribution channels of choice and is why the outcome of the U.S. Department of Transportation’s Notice of Proposed Rulemaking (NPRM) on enhanced airline passenger protections is so vital to the interests of corporate managed travel. 

BTC generally supports airlines’ unbundling initiatives as a potential industry strategy to develop competitively defensible, sustainable and profitable revenue streams. The new American Airlines’ services and discounts could be a welcome development for corporate travelers, if they were incorporated into established agency and corporate workflows. Because they apparently are not, they will force upon agencies the false choice of incurring the inefficiencies, costs and service challenges of implementing entirely new workflow solutions on the one hand, or incurring the costs and challenges of supporting a series of one-off supplier direct-connections on the other.   
 
Commenting on the American Airlines announcement, Michelle De Costa, Global Travel Manager, Sapient stated, “An approach to unbundling that ignores the interests and needs of all supply-chain participants, including the corporate customer, if adopted by multiple airlines would add cost and overwhelming complexity to corporate managed travel programs. Travel managers need to be exceedingly clear with their airline partners that they will not support the disaggregation of content important to their managed travel programs.” 

Gary Hance, Director of Group Operational Development, ATPI (Advanced Travel Partners) UK Ltd. stated, “The point of a global distribution system is to provide TMCs and their corporate clients – who make up the greatest proportion of the airline highest yield travellers – with genuine unbiased information on the overall cost of the products as well as the service information in terms of aircraft type, flight schedule and on time performance. Making it harder to compare by charging for some features and not for others is problematic, but forcing an agent or corporate to support a direct-connect link to the airline system seems a step too far.”

“Should this logic prevail then it is feasible to see TMCs and their corporate customers required to maintain and finance direct-connects to many airlines in order to best serve their travellers. The individual checking of these data sources would be unviable within the current fee structure of the TMC, and would be a potentially big extra expense for travel bookers in the corporate environment. ATPI urges American Airlines to rethink this policy and make available information and purchase opportunities through all its distribution channels,” continued Hance.

Importantly, according to BTC, travel managers should weigh in on the U.S. DOT’s just-published NPRM, which proposes that airlines make available on their websites all their ancillary fees so that consumers understand their “all-in” fare options early in the shopping process, and before they make a purchase. More than 50% of travelers, and virtually all mid-size and large companies, use travel agents and TMCs. DOT is considering requiring airlines to make ancillary fee information available to agents and TMCs through global distribution systems at the same time it is available on their websites and is seeking comments from the industry on that proposal. 

As the airline sector becomes more concentrated, and choice is diminished, the need for better consumer information grows so that passengers are better informed about competitive options. Passengers need to be armed with complete and accurate information as a means of enhancing competition and offsetting the loss of competition resulting from mergers and alliances. Passengers and travel managers alike have a legitimate need for neutral and complete data sources and a concentrated airline sector should not be empowered to impair the data flow to such neutral sources.
  
“Full access to airline and other supplier content through distribution channels of the corporation’s choice has been the consistent demand of the business travel consumer,” said BTC Chairman Kevin Mitchell. “Fragmenting content in a way that leads to the inefficiencies of multiple systems and interrupted workflows shows a troubling lack of responsiveness to that reasonable consumer demand.”  

Travel managers and TMCs can file comments with the U.S. DOT here; docket DOT-OST 2010-0140.

###

CONTACT BTC || Kevin Mitchell | 610-341-1850 |
mitchell@BusinessTravelCoalition.com

About BTC
Founded in 1994, the mission of the Business Travel Coalition is to bring transparency to industry and government policies and practices so that customers can influence issues of strategic importance to them. 

---