AA Bets On BA Alliance Approval Next Year

I>San Francisco </I>- American Airlines vice president and general sales manager Jack Williams said he expects the British Airways-American Airlines alliance to be approved no later than the fall of 1997.

The two airlines had hoped the U.S. and U.K. governments would hammer out an open skies deal by this month, but the negotiations are turning out to be "a lengthier process than we had anticipated," Williams said. Despite the setback, he said AA is "more committed to it now than when we announced it in June."

Following a presentation here at the Corporate Travel West conference earlier this month, Williams also answered several questions relating to travel distribution.

Regarding net fare deals, he said that although American Airlines has fewer than 10, "we have some very solid and successful net-net deals. We're quite satisfied with ours and you will see more, although sometimes they don't get done because the economics aren't there." Williams noted that the carrier's largest net deals-in which corporations and airlines negotiate for fare discounts without travel agency commissions or overrides-took up to eight months to work out but are good for two to five years.

Addressing travel agency commissions, Williams said, "it's never been on our agenda to bypass the agency network, but if United and Delta are paying less to distribute their products, we have to match them." Furthermore, he warned any agencies who believe their role is to produce a ticket that those kinds of booking and documentation functions will be automated.

Williams claimed that security will be much better using American's electronic ticketing system than those of other airlines because of AA's electronic gate readers, but he acknowledged that security concerns following the TWA crash have prevented American from fully implementing the new service. The airline by year-end will allow certain top customers to swipe their card and go right through the gate.

Williams said all AA seats will be equipped within the next year with power adapters for laptop computers, extending in-flight traveler productivity beyond the one- to two-hour life of a battery.


Carlson Wagonlit is forming a consortium of technology firms to provide system support for Carlson's Act One software. The new venture will include the likes of IBM, MCI, Computer Sciences Corp. and Sun Microsystems, said Carlson Wagonlit's North American vice president of sales and marketing, Robin Schleien. The new company will be formed during the first quarter of next year.

Carlson will partner with a global player-perhaps including some of the above-listed companies-for system training. An RFI for that endeavor will go out next month.

The company's Act One suite of products will soon be fitted to accommodate pre-population of data from MasterCard and American Express, Schleien said.

Schleien revealed the plans during a product lab session comparing expense reporting products. Carlson Wagonlit represented agency products, while Gelco Information Network represented a service bureau offering and Portable Software represented third-party solutions.

Meanwhile, Redmond, Wash.-based Portable Software said its expense management solution software will be available for an intranet setup and Macintosh platform capability in the next six to 12 months. Portable also is about to roll out a U.K. version of the product, which will reflect reporting regulations in the United Kingdom.


During the <I>BTN</I> Executive Forum-focusing on the involvement of corporate senior management with travel-David Schwartz, the president and CEO of Hercules, Calif.-based Bio-Rad Laboratories, expounded on the impact of the Internet. Noting that "a lot of employees are beating the travel desk in terms of discounts by using the Internet," Schwartz said that when executives at his company book a last-minute trip that way, "it is more efficient than using a travel agent." He said that while the process may not always be more efficient, the Internet is a "serious challenge" to the travel agency business.

Also at the Forum, John Giovanola, vice president of administration for Santa Clara, Calif.-based NEC Electronics, said his company has saved $2.5 million by focusing on travel expenditures. Japanese-owned NEC, which has five U.S. divisions, will form a team to focus on possible savings in the ticketing process for 1997. One division already has an innovative program in place: It provides cash incentives for travelers who book tickets that require a Saturday night stay; the company splits the savings.


A Canadian technology firm that specializes in linking mainframe computer systems to the World Wide Web is the latest to offer custom-built Internet and intranet booking engines to corporations and agencies.

Edmonton-based CEL Corp. currently offers airline bookings via the Web and plans to add hotels and car by year-end, according to Bruce Matichuk, vice president of research and development.

Working with three corporations, CEL has developed booking tools that bias displays according to corporate policy. One of the companies has been using the system to check availability and schedule options for six months. The market appears to be looking for systems that cost about $100 per user, Matichuk said.

New to the travel industry, the computer industry veterans at CEL said they are surprised to find "a lack of automation out there and a lot of pent-up demand in the travel industry," Matichuk said. "We don't really have the solution customers want, but neither does anybody else. Customers want expense reporting, fare shopping and editing of travel policy, but it's two years away."


Xtra On-Line will beta test its automated booking system with the Worldspan CRS next month and plans to debut a Web product with multi-CRS capability in the first quarter of 1997. The Web product is designed for agencies or corporations with less than $10 million in sales, according to Paul Dixon, director of sales for the Dallas-based company. Customers with more volume will find the $9 hourly rate offered by the dial-up system to be more cost effective, Dixon said. Eighty percent of customers are using the system, which is currently available on Apollo, to book reservations rather than just look at fare and schedule displays.


San Jose-based Apex Travel has spun off its technology unit into Apex Solutions, offering reporting software for other agencies and corporations.

The Advanced Travel Information Systems reporting is a query-based reporting package that runs on Windows 3.1, NT or 95. Accepting data feeds from most major back-office accounting systems and Apollo, ATIS then audits the data and combines it with existing databases. Users can run canned reports within ATIS or generate ad hoc reports.

Results can be exported to Microsoft Office for further analysis, graphs or reports. The company plans to complete work to accept data from SABRE next year, according to Larry Gove, vice president of marketing. The software starts at $3,000.


Five years after raising the idea of consolidating travel in Kaiser Permanente's 12 autonomous U.S. regions, the health maintenance organization is starting to see benefits. Airlines that didn't want to talk about agreements before are calling national travel manager Margy Skinner, who now has the data that she and the airlines need to negotiate deals.

Gradually building the case for consolidation, Skinner contacted each region to learn if it managed travel, if it had designated agencies and how much money it spent.

Realizing that she was the only full-time employee dedicated to travel within Kaiser's regions, Skinner took the lead in collecting travel spend data and brainstormed with others on consolidation plans. She learned that air spend per region ranged from $200,000 to $2 million a year, with the total at $12 million.

Emphasizing the service enhancements and projected savings of $750,000 in the first year, Skinner sold controllers in each of the 12 regions on a plan to consolidate earlier this year. As implementation of the new agency was to begin, two regions backed out of the consolidation plan, but Skinner hopes to bring them back into the program after showing them the benefits.

In June, Kaiser began a three-month conversion to Rosenbluth International. "We started with the small regions, so anything we need to fix can be done before it's magnified in a larger region," Skinner said.