BA Debuting Dual B2B Portals

<B>BA Debuting Dual B2B Portals</B>

By Amon Cohen

British Airways' brand new e-commerce business-to-business division this summer will launch an online booking and management portal for small and midsize corporations in the United Kingdom, and will follow up with a heavy-duty version for multinational clients soon afterwards.

The summer release will be a modification of the GetThere.com booking engine and will allow clients to book any scheduled airline, hotel or car hire company on the as-yet-unchosen global distribution system partner. The new system will filter reservations through the client's travel policy and collect management information. It will be the first corporate product to emerge from the business-to-business division, which BA launched earlier this year.

The airline views e-commerce as the ideal way to draw itself closer to corporate clients after years of criticism for a high-handed attitude toward those who pay for the seats.

Simon Parks-Smith, BAs' newly appointed worldwide head of business-to-business e-commerce, admitted the change in attitude had been forced by the growing power of travel purchasers. "We are trying to improve our B2B relations," he said. "Traditionally, we have been very strong at consumer relations but travel buyers are gaining so much more influence over the purchasing decisions and are enforcing policy in a much more robust way."

A recent example of BA's new-found readiness to work with corporations was the building of an extranet booking connection between HSBC Bank USA and the airline's internal reservations system, known as BABS (<I>BTN,</I> March 6). However, said Parks-Smith, "that was pretty much a one-off. That was an expert user product, which is not the way we think the market is going. It is moving more toward ease of use."

That is certainly the philosophy behind the self-service collaboration with GetThere for small and medium enterprises (SMEs). Parks-Smith claimed the product "guarantees 100 percent neutrality" for airline booking. However, it will be accompanied by BA-based content of the type that BA already is feeding via extranets to around 100 corporate clients. The content includes Executive Club status updates, online checkin and also potentially negotiated fares, although most SMEs will not have the volume to leverage these from the airline. BA also will use the system to push special offers and vital messages, such as the encouragement of e-ticketing.

Other plans include an online facility for travelers to book private travel with their accumulated Air Miles, plus the ability to trace missing baggage.

However, one option not up for grabs is a discount for purchasing online. "Moving people online through price isn't the sensible thing to do," said Parks-Smith. "We should be achieving it through making it a better service. However, it will lower transaction prices, which means customers will pay lower fees to their agents."

The B2B division is making SMEs its first port of call partly because the system is quicker to get off the ground but also, Parks-Smith added, because it helps the airline target a previously untapped market. "There are simply too many SMEs," he said. "We would have to employ an army of account managers and buy up the whole of the Vauxhall car fleet to visit all of them. E-commerce enables us to have a one-to-one relationship with them for the first time."

Like other suppliers in Europe, BA had recognized the growing importance of the small and medium enterprises market. In December, it launched a loyalty program for 2,000 smaller U.K. corporate clients, called onBusiness, giving free flights, chauffeur-driven transfers and other benefits to companies that purchase full-fare tickets.

BA has not yet chosen a partner for its large corporate portal but the crucial difference will be its ability to integrate data with the client's legacy systems. Negotiated fares clearly also will play a more important role.

For both portals, said Parks-Smith, the major selling point will be the ability to merge online and offline management information. Since no company ever achieves 100 percent adoption, the BA systems will make it easy to book via the telephone as an alternative, either through the client's agent or through a 24-hour BA call center. Parks-Smith claims BA has found a way to ensure that all the management information is seamlessly integrated, whether booked online or off. "For me, the single biggest problem to crack has been these hybrid environments," he said. "The key is that we are able to combine MI for both."

The two U.K.-based portals clearly draw their strength from BA's dominant route network in its home market, but the airline also is developing online booking projects for customers in the United States.

Looking ahead, e-commerce could create additional benefits for multinational clients. BA recently has stepped up its efforts to forge worldwide deals (<I>BTN,</I> Jan. 24) and Parks-Smith thinks going online will enhance the global proposition. "This will lead to globalization of air deals," he said. "Market boundaries will be broken down because e-commerce provides a much more transparent flow of information." He added that clients have been equally remiss in coordinating internationally to enforce global deals and that e-commerce will allow them to gain control internally in much the same way.

On the question of new e-commerce models, such as online auctioning and purchasing consortia, Parks-Smith is not ruling anything in or out because of the quick pace of change. He also is aware that the new purchasing environment threatens to change the airline seat into a commodity.

"We want to forge a relationship with corporates that is based on more than price," said Parks-Smith. "E-commerce potentially commoditizes air travel. Our challenge is to create real value, such as by striving to be Europe's most punctual airline. We are investing enormously in these values, but the reality is it will be a constant battle for suppliers to keep their heads above commoditization.