April 14 - Corporate Travel Departments And TMCs Seek Partnership with Airlines Over Merchandising, Distribution

WASHINGTON, DC April 14, 2010 -- More than 200 corporate travel departments, travel management companies and travel groups from 10 countries yesterday wrote to major U.S. airlines offering to partner in an effort to support innovative distribution strategies and to maximize traveler uptake and resulting airline revenue growth from ancillary products and services, such as additional fees for checked baggage and pre-reserved seating. The coalition of organizations is endeavoring to elevate and inform industry and public-policy debate surrounding the rapid evolution of airline product unbundling and ancillary-fee strategies, including impacts on supply-chain participants and corporate customers.

“The success of managed travel programs is reliant upon travel management companies having efficient access to the full range of airline options for any particular trip, and being able to monitor, track and report on the comprehensive final-cost of airfares plus related services purchased,” stated Michelle de Costa, Global Travel Manager for Sapient. “The verified workflow processes of travel companies and online booking tools that feed into our corporate systems rely almost exclusively upon the airline booking and servicing capabilities of global distribution systems. We are looking for airline partners that acknowledge and respect our needs.”

Unbundling and repackaging strategies bring both promise and risk for corporate managed travel. Corporations, airlines’ most important customers, want a seat-at-the table and a say in how distribution system changes proceed. They are proactively coming forward with their views calling for a dialogue that will lead to equitable strategies that ensure the success of all supply-chain participants.

Corporate travel managers are calling for adoption of industry principles and standardsthat, for example, encourage airlines considering unbundling strategies to:

·not undercut the value of corporations’ contracts with those airlines;

·make available their unbundling initiatives in a manner that does not discriminate against a corporation based upon its choice of reservations or fulfillment processes that best meet its needs; and

·to proceed in a manner that respects the efficiencies of prevailing travel procurement processes utilized by corporations.

“Major and far-reaching changes to airline business models, occurring in real time, will have significant impacts on all participants in the supply chain. Corporations that buy billions of dollars in air transportation services, and that keep the lights on at airlines’ headquarters, are making their consumer preferences known when it comes to how they want to buy these services,” said Business Travel Coalition Chairman Kevin Mitchell. “Forward-thinking airlines are listening to what we have to say; some carriers have come to realize that to secure more high-yield business travelers, they must respect the modern procurement and travel management practices of their best customers.”

“Consumers expect the travel agents they depend on to have complete and transparent access to booking information to do their jobs,” said Chris Russo, President and Chair of the American Society of Travel Agents. “Travel agents do not favor separate silos that will make booking air travel more complicated, opaque and expensive. We urge the airlines to work with us to adopt standards that give fair and equitable access to booking information to all of our members for the benefit of those consumers who choose to buy their air travel through us. Together we can create a win-win-win for travel agents, their customers and airlines.”

The full text of the letter with signatories can be found below.

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