BTC issues business travel industry advisory for UK / EU

Referring to the long-term CRS-airline agreements in the US in 2006, Business Travel Coalition (BTC) says as per its sources and research, some airlines in Europe are planning to unveil critical proposals.

The proposals are related to shifting of distribution costs swiftly and surely to end customers and fragment content in the near term, and completely marginalise trusted players in business travel distribution in the longer term.

“What’s more, these airlines have done minimal outreach to the industry and to business travelers to explain their intended moves. Indications are that new programmes will be announced with little or no discussion and with little or no lead time. Unless the industry demands its seat at the table soon, these unilateral reforms will become a dangerous reality,” stated an advisory.

“Such ambitions are significantly more far reaching than US airlines’ efforts in 2006 to revamp the distribution system to their benefit. British Airways appears to be in the vanguard of reengineering distribution at the expense of its most valuable customers as multiple CRS agreements are up for renewal at the end of February. Instead of advancing the clear consumer preference for consolidating travel purchasing through one efficient source, BA seems intent on reversing the march of modern travel management. BA wants to charge customers for distribution costs they are already paying for in the price of airline tickets, and then fragment content to its further strategic advantage -- and to the corporate buyer’s detriment,” it added.

“European airlines seeking to change the distribution structure to their long-term advantage will likely offer their largest customers a “Faustian Pact” wherein they would be made whole financially with respect to anticipated content fees in return for their implicit acquiesce in this distribution scheme. Of course, even these corporations will be asked to pay content surcharges in their next airline contracts. Encouraging accelerated content fragmentation, and accepting a distribution cost-transfer, places all corporate travel buyers on a slippery slope where what could be transferred next might be the cost of credit, airport service costs and pilot pension expenses. As a matter of principle, customers should not pay twice for the cost of distribution, or any other cost, already reflected in the price of their tickets.”

“Importantly, CRSs should step up to the plate and articulate their visions for the future of travel distribution in Europe including what steps they intend to take to protect their corporate customers’ interests. Corporate travel managers’ interests will be aligned with those who advocate for full content secured at reasonable costs. It is extremely important for the distribution side of the industry to rally around this core concept to secure our collective futures.”

On its part, in collaboration with major European travel associations, BTC is reaching out to industry stakeholders with lessons-learned from distribution system reform in the US to ensure painful mistakes are avoided in Europe and that travel distribution remains efficient and affordable. To this end, an Industry Position Paper is being developed by European travel industry participants utilising wiki, a collaborative, peer review-enabling technology.