Passageways Prez Aims To Add Value

<B>Passageways Prez Aims To Add Value</B>

By Megan Hjermstad

<I>Traverse City, Mich. -</I> With a new president leading the way, Passageways Carlson Wagonlit Travel is planning to continue its steady pace of 35 percent annual growth for the past 20 years to reach $70 million in air sales this year and $100 million in 2001.

Former Northwest Airlines executive Tom Rockne replaced former Passageways president Jim Walter, who left the company after 20 years. Rockne, who came onboard in mid-July, was with Northwest Airlines for 18 years, serving as regional vice president of sales for the Western region and most recently serving as vice president of sales and planning for MLT Inc., a wholly owned subsidiary of Northwest, which packages charters out of the Midwest. While with Northwest, Rockne developed a relationship with Passageways chairman Tom McIntyre, to whom he now reports. "That's where I really came to know Passageways as one of the foremost distributors in terms of volume and operations," Rocke said.

Rockne said being prepared and willing to adapt to industry change is key to Passageways' success. "We have to be focused and nimble. There are two types of agencies, the 'Oh no' agencies that say, 'Oh no, commissions got cut,' and the 'okay' agencies that say, 'Okay, what are we going to do now,' " said Rockne. "Thankfully, Passageways is in the latter category. We're looking very seriously at what we're going to do to add value for our customers."

Passageways has an even business mix, split 40-40 between corporate and leisure, with significant groups and incentive travel. Rockne will continue to grow the base travel business by delivering value and added service to retain and attract corporate clients. "The fees being charged today are worth every penny and more. It isn't the glass is half empty or half full, it's that the glass is gone," he said. "We're using a whole new set of glassware."

Michigan's second largest agency, Passageways has 23 full service offices in the state. "All of our retail offices are in Michigan, but our reach goes far beyond," said Rockne. "We are bidding--and winning bids--inside and outside of the state of Michigan."

Passageways last December began handling its largest corporate account, Auburn Hills, Mich.-based Volkswagon of America Inc., with an $18 million annual air spend. Passageways at the end of August also added Dallas, Texas-based Kitty Hawk Air Cargo, with a $6 million air spend, which it is servicing through its Novi, Mich., office. "We went and said, 'Here's what we can do for you.' We presented options and opportunities to reduce costs. We listened to what their needs were for the staff, and that sent such a strong message," said Rockne. "How we handle the particulars of an account shouldn't be a cookie cutter. We want to define how we can provide the best service and then deliver that to them."

Passageways is the fourth-largest franchisee in the Carlson Wagonlit Travel network. Rockne said the Carlson travel network offers additional sway and opportunity with suppliers, but the Passageways approach is more focused. "We take the lead from them, but further define our outlook," Rockne said.

Passageways' primary carrier is Northwest, and its secondary carrier is United. Rockne said what is critical is that Passageways has multi-level contracts, so five to six people from Passageways can contact five to six people from the supplier organizations.

"Having come from the airline side, I know there still are opportunities out there with vendors for true partnerships. We think we have some of those," said Rockne. "We want to deliver for them a disproportionate share so we are incentivizing our people to sell preferred vendors but we are not doing it to the detriment of our customers. Our first goal is to satisfy our customers.