Ilona De March
Amid calls for at least partial deregulation in Europe of global distribution systems, travel management company BCD Travel is developing its own platform to ensure clients receive full content regardless of which system their preferred airlines use. Ilona De March, president and chief operating officer for BCD Travel in Europe and India, spoke last month with The Transnationalabout her company's plans and expectations for market development in those regions.
There have been calls for partial GDS deregulation in Europe, keeping mandatory participation rules and a ban on tying commission payments to the use of a particular system. What's the best way to go about deregulating?
We do agree with the concept of GDS deregulation; however not all of the airlines have completely divested from ownership of the GDSs. For us, that is a prerequisite. Amadeus, being the market leader in Europe, has home market strength with Lufthansa, Iberia and Air France. These airlines could be committed to not participate in all GDSs, which would be detrimental to competition and customer choice. Clients want to have an easy point of view and to make sure they get all the fares, regardless of which system they're using. It has already become a challenge. We know of certain airlines in Europe that are favoring some direct access. Are we really going back to the 1970s, when there weren't any GDSs and you had to go to every airline directly to get something done? We want to be fast and we want to make sure clients get the best information available, and I don't think anyone has an interest in going to five sources when, originally, a GDS was built to centralize this information. We're looking at our own platforms, as well, in order to be independent. We're building something, because otherwise we cannot ensure that we have full content for our clients in the future.
Can you elaborate on that?
It's not just a platform for the United States. We're going to go into some testing in Germany and Belgium this year. It's to get independence and to ensure that we're able to offer full content to our clients. Global technology, as such, does not really exist. There are no global providers in every country of the world. Even in Europe, if you look at Amadeus, they are basically available in all the various countries--and this goes for all the other GDSs as well--but the offering in Belgium is different than the offering in Germany, or in France, or in Spain. They have all been built on their national markets. So, we're looking at regional strategies to see what we can do from a technology point of view because we see the requests are different than what the U.S. market is looking for.
Are multinational corporations taking a more regional, rather than global, approach to structuring their agency agreements?
Interestingly enough, there are only a few really "global" programs where clients choose one TMC. It is, in many companies, difficult to make one global decision. The devil is always in the details. Corporations have found out that it doesn't make sense [to use a single TMC] because of some special technology relationship or that the agency being used in a particular country is also a client of that company, or that the specific technology being asked for is only available in a couple countries--and so it doesn't make sense to push through a global decision. These are the difficulties a company must deal with if they want to make a global decision. So a corporation says, "The goal is a global decision, but we still need to check whether it commercially, financially and operationally makes sense." We're seeing more multinationals go for regional agreements and then I'm sure in two or three years when the next request for proposals process comes around, they will be global agreements.
How are airlines reacting to multinationals showing interest in cross-border ticketing through their TMC partners?
We need to differentiate what is really meant by "cross-border." In general, as a company, we do not issue cross-border tickets. We just issue tickets on our customers' demand. There are legal rules on how the coupons are being used and in which order. Airlines do control whether the coupons are used in that chronological order. You need to be very careful that you adhere to these rules. There are, of course, tickets that are issued outside the source market and point of origin. That is more the central fulfillment of customer requests. For example, we have one large client based close to Brussels, and we service 10 countries out of that location. We do not call that cross-border ticketing, but we issue any ticket out of Belgium even if they start in Frankfurt. All of Europe, for that client, is being serviced out of one location because the client wanted to do that. This is something we see more and more because many corporations are asking, "Should we really have to deal with an agency, even if it's the same all over Europe, in every country, or is it not easier and manageable to have one call center somewhere in Europe that is handling all the reservations and ticketing for all countries?" Airlines do not have a problem with this. As a matter of fact, they are slowly but surely thinking more internationally. When we introduced this concept four years ago, there were discussions, but we reached agreements on how to deal with this.
BCD Travel recently deployed a global corporate social responsibility initiative. What sort of changes does that mean for the EMEA region?
In Europe, for a number of years, we have had such a policy. We already had carbon dioxide emissions policies and we've had some International Organization for Standardization environmental certifications in some countries because the "green" movement in Europe was, and still is, a little further down the road than it has been in the rest of the world. Now the whole of BCD is picking it up because CSR, in general, has become a big issue all over the world. It's going to be a big issue at [this week's] G8 Summit in Germany. It has also hit the travel industry in the past six to 12 months. We're now talking about the next steps, and how we as a company get better at this. Also, how can we help our clients when they travel? What reports can we give them on CO2 emissions? We ask them if it would make sense to not go on a trip because you could also do it via virtual conferencing. I had one large international client come up to me a couple months ago that would like to take the reporting that we provide to them and create an award within their company for reducing CO2 emissions by not always sending employees on a trip. We have a tendency to jump on airplanes too easily, particularly for internal meetings. If you know everyone well already and you have videoconferencing facilities, why not try to do this rather than jump on a plane again? The company wants to set up a bonus mileage system where you would earn some points [for avoiding air travel] like a frequent traveler program and they would then reward that back at the end of the year with either real cash or some bonuses or whatever they want to do.