Following the
announcement last month by ARC president and CEO David R.B. Collins that he
would retire in one year, he spoke with BTN editor-in-chief David Meyer about his time with the U.S. airline bank
settlement and data management organization and the changes he has witnessed
along the way.
Business Travel News:
What are the biggest industry changes that you have seen?
David Collins: It's
been an interesting 22-year ride. One of the biggest things to me has been the
consolidation that has taken place. We have far fewer shareholders here at ARC
than when I came here, from Pan American and TWA, which no longer exist, to the
most recent Delta-Northwest merger, the potential United-Continental merger and
things that have pushed consolidation on the agency side as well. The economic
forces have been at work on both sides. The travel agency side has been
impacted by the commission changes from the second half of the 1990s onward as
people looked to change their business models. In the end, it has probably been
good for everybody, as you end up being more efficient and in a better position
to face the challenges in the marketplace.
From an ARC perspective, one of the great things is that the
system has been able to support the changes in the industry. I've always felt
that we provide a very flexible way for people to do business. If we didn't
provide that, I don't think that we'd be in business now. I felt then and I
feel now that ARC is a very important factor in helping everybody do business
with each other. Being a settlement organization is obviously the core of it
all, but I have wondered at times if change is so dramatic that will people go
to other ways of doing business. The challenge for us is to make sure that we
evolve and change so that we still help them do business in a very efficient
way.
BTN: You've not
only seen companies go away, you also have seen others join in.
Collins: One
significant change is that the low-cost carriers for a while did not see ARC as
a way to do business. In the last 12 months, that's been one of the key changes
from my perspective. For example, we saw JetBlue come into ARC as a participant
and WestJet come in toward the end of last year. AirTran moved to support
electronic ticketing through travel agents.
BTN: How has
their interest in doing business with corporate travel buyers been in driving
that change?
Collins: It's
been a major factor, because prior to that I don't think they were making it
that easy for the corporate world to do business with them. We bring to the
marketplace efficiencies in doing business that they were not taking advantage
of. It's really paid off for them to come into the system and it's making
business life for the TMC world better.
Another big change right now is the whole movement toward
the unbundling of airline ancillary fees. We're supportive, as an organization,
of the way our customers want to move forward in the ancillary environment. We've
been working on the electronic miscellaneous document, and we'll roll that out
later this year to help our customers adapt to the new environment.
BTN: Were you
surprised by the rate of that development?
Collins: Yes, I
expected it to move forward a bit quicker. The carriers have been moving ahead
with the ancillary fees in significant numbers, but in terms of the ability of
the agency community, carriers and GDSs to sort that out, I expected that to
move ahead quicker.
BTN: While the
industry has gone through a lot of changes, you've also made changes
internally.
Collins: It's
always important for companies to reinvent themselves to be successful. We
reinvented ourselves in the '90s, because we took a paper-intensive system and
made it electronic. The amount of money we've been able to save the airlines
and the agents by eliminating all the paper has been huge. By now, it's more
than in the hundreds of millions. That positioned us in 2000 to get into data
warehousing, which also saved money because one of the things our data
warehouse did was eliminate the need for people to store paper. People were
storing agent coupons and so on. The first thing we did with the data warehouse
was to create the ability for us to store the ticket copies for them.
BTN: ARC also
created the Corporate Travel Department designation on your watch.
Collins: Yes, in
1998 we created the CTD as part of our accreditation system. Corporations had
come to us and wanted to be part of the system, so we turned around and said
OK. At that point in time, the TMCs weren't very happy with that development,
but one of the good things was that it in fact created more flexibility, and
the CTDs continue to do business with TMCs. I thought that was one of the good
parts of that development. We weren't excluding TMCs, but the CTDs wanted more
transparency and flexibility in what they were doing. It seems to have worked.
BTN: Why the
timing of your departure?
Collins: You can't
fight the clock. I hit 65 next May. I wanted to give my board of directors and
shareholders one year's notice that I would like to retire at normal retirement
age.
BTN: After 20
years with IATA and 22 heading ARC, what do you do next? It's hard for me to
image you heading for the beach.
Collins: Me too.
At the moment, I haven't formulated plans for the next step of my life. Right
now, I'm focused between now and next June on making sure that I can leave the
company in good shape, pass it on to a successor and make sure for all our
customers and employees that it's a very transparent change and a smooth
transition. Our TMC and airline customers can anticipate the executive team
here will still be very focused on moving forward, and they can continue to
rely on this company as they have done before now.
This story originally
appeared in the August 9, 2010, edition of Business Travel News.