Though "legal constraints" thus far have prevented American Airlines, British Airways and Iberia Airlines from issuing single corporate contracts encompassing the three partner carriers, they expect to "start rolling them out soon, and by soon I mean the first quarter this year or early next quarter," according to Iberia U.S. country manager José María Alvarado. By year-end, the carriers expect to transition all pre-existing transatlantic corporate contracts to their antitrust-immune joint business. Representatives from AA, BA and Iberia, however, expect agency contracts to be converted as soon as next month.
"We still have to overcome some legal constraints around the contracting part of it," Alvarado said of joint corporate deals, "but the good news is that we are creating some contracting guidelines that all three of us can abide by."
According to an Iberia spokesperson, the legal issues relate to "certain confidentiality clauses" in existing contracts between the airlines and their respective corporate clients. In November, a BA executive told attendees at a Guild of Travel Management Companies conference that three-quarters of its clients had signed confidentiality-clause waiversallowing the airline to share data about them with its new joint venture partners.
However, those issues have not prevented the carriers from cooperating on corporate sales. AA, BA and Iberia, Alvarado said, jointly have bid on corporate business and in some cases formulated contracts to replace those that expired since the October launch of the joint venture. Those, he noted, are "not a single contract," but rather "an aligned contact from all three carriers."
"We have some RFPs already in the market that we need to respond to quickly, and there are some opportunities," Alvarado added. "We are taking a soft approach, but our goal is to have every contract out there being a joint-business contract."
AA regional vice president of passenger sales Cathy Berg said there is no "hard date" to fully transition separate AA, BA and Iberia corporate contracts to the joint business. The goal, though, is to complete those this year, according to BA regional director Kevin Burns.
"We're taking them on where there are RFPs for renewal and where we see opportunities to put something in place that didn't really exist before," Berg said.
On the agency side, Burns said to expect "a much more immediate and comprehensive response. There's an April 1 start for that."
While executives claimed no major changes to the sales organizations at their respective airlines as a result of the joint business, they noted that the airlines in major U.S. markets are moving personnel under one roof. AA, BA and Iberia have co-located offices in Washington and Chicago, for example, and this spring plan to move into one New York office.
The article originally was published in The Beat