London - AirPlus
International has started channelling hotel folio data to clients in the United
Kingdom and is working to improve hotel data in other markets, including a
pilot folio program with Accor. The corporate payment specialist also is
expanding partnerships with rail and car rental providers to make their
services payable through the AirPlus lodge card. Meanwhile, AirPlus in China is
experiencing significant growth as competitors face regulatory restrictions.
Chairman
Patrick Diemer at a press briefing here outlined data expansion plans and
announced a record AirPlus profit of €25.1 million for 2010, up from €17.2
million in 2009 and a previous high of €20.2 million in 2008. Customers charged
a record €21 billion, up from €17.1 billion in 2009 and €18.1 billion in 2008.
In Germany and the United Kingdom, where AirPlus is the issuing bank, volume
reached €8.8 billion, similarly outperforming the €7.3 billion in 2009 and the
previous record of €8.5 billion in 2008.
AirPlus
for 2010 also reported a 12 percent increase in total flight volume and a 5
percent rise in transaction numbers by existing clients. The company announced
that it picked up more than 2,000 new customers during 2010, bringing its total
to 35,000. According to Diemer, AirPlus is the third-largest handler of
payments worldwide for International Air Transport Association air tickets in
the business-to-business market, and second in Europe. He estimated that
AirPlus claims a market share in Europe of 42 percent, two percentage points
behind American Express.
Diemer
said he expects AirPlus in 2011 to further improve its figures. The number of
flights it handled in the first quarter was up 9 percent from the same period last
year and he conservatively estimated the company's full-year volume would
increase by a similar amount.
Air
ticket prices also are moving upward. In February 2011, the average was €523,
up from €499 in the same month last year and almost identical to the February
2009 average of €522. However, the average ticket price still is nowhere near
the pre-recession average of €583 in February 2008. Similarly, at a press
briefing this week in New York, AirPlus for March 2011 reported an average
ticket price of $672, up from $632 and $645 in March 2010 and 2009,
respectively, but well below the March 2008 figure of $863.
A
return to premium cabins helped to push higher average ticket prices. AirPlus
said 14 percent of the tickets it handled in 2010 were in business class, above
the 2009 and 2008 figures of 8 percent and 12 percent, respectively. Today's mix,
however, remains very different from 2001, when 43 percent of tickets were in
business class.
Product Development
AirPlus
aims to bring its data standards up to the same level of detail for hotel, rail
and car rental as for its core air specialization. In the United Kingdom, the
company's second-largest market after Germany, AirPlus has a partnership with hotel technology specialist Conferma to allow direct billing and settlement through
the automated generation of unique virtual card numbers for accommodation bookings.
AirPlus U.K. managing director Yael Klein said that as of February 2011, the
joint product with Conferma is generating folio data for guests. As a result,
clients receive details from the total hotel bill, including number of room
nights and a breakdown of the room rate plus extras such as food and beverage.
Klein said the Conferma partnership also now allows clients to attach to each
transaction such corporate references as cost center, employee identification
and budget codes.
Hotels traditionally
have been a problem area for card companies in terms of management information
quality. Buyers often receive little more data than the name of the hotel and
the total amount paid. Companies such as MasterCard have made some headway in
taking direct folio feeds from hotels in the United States, but progress in
Europe has been very limited. Diemer told BTN
that AirPlus is trying to improve the situation. "We are doing a lot of
steps with hotels," he said. "It is not all to the level of folio
data but customers will at least be able to see the number of room nights. We
also have a direct connect pilot for folio data with Accor."
AirPlus
also is expanding acceptance of its lodge card for car rental and rail. "When
I ask customers what they want us to improve on, this is the most mentioned
requirement," said Diemer. In Germany, AirPlus handles as many
transactions for rail as for air thanks to a long-standing partnership with
Deutsche Bahn. Swiss rail provider SBB also accepts the AirPlus lodge card, as
does SNCF, although only through its business portal.
Diemer
said an announcement on a deal with a large international rail operator is
imminent, and talks have started with such U.K. rail booking tools as
Thetrainline.
Meanwhile,
AirPlus has expanded its contract with Avis to be global rather than just
European in scope and is looking to sign more car rental vendors.
AirPlus
this year also "wants to go into the MICE market," according to
managing director Klaus Busch, speaking during the New York briefing. "We
started this in Germany and are rolling it out in Europe" by connecting to
meeting-booking platforms and hotel chain back-office systems. Busch said the
company is trying to prioritize system connections "to get the majority of
the data." Similar to central accounts for air, AirPlus typically issues a
"limited number of meeting cards per customer."
Huge Growth In China
In China during 2010, AirPlus increased revenue by 84 percent, making it
the company's third-largest market worldwide. Diemer attributed the
near-doubling in business to €108 million to growing interest in travel
management in China and the AirPlus advantage of operating with far less
regulatory interference than its rival corporate payment providers.
Payment networks American Express, Visa and MasterCard are not permitted
to handle payments in the renminbi, the Chinese national currency. The Chinese
government is building its state monopoly UnionPay network for a market that
MasterCard forecasts by 2020 will overtake the United States as the world's
largest. UnionPay also is the only network allowed to handle transactions in
foreign currencies for Chinese cardholders traveling abroad. The U.S.
government has filed a formal complaint with the World Trade Organization over
China's denial of access to foreign-owned payment networks.
Diemer told BTN that AirPlus
has evaded the problems besetting its Western commercial payment rivals because
it is a Universal Air Transport Plan issuer. "Not every regulatory
institution looks at us as a credit card company," said Diemer.
"Because UATP is 100 percent an airline acceptance vehicle, its regulatory
authorities say we are a billing system, which puts us in a different category
and not in competition with UnionPay. Our lodge card is the only working lodge
card in the Chinese market, which explains some of the rise in our
volume."
Diemer said AirPlus rivals "are smart competitors and they will
find solutions over time." He added that AirPlus in China has recruited
more staff than its revenue there currently merits in anticipation of a
continuing steep rise in business.
When AirPlus entered China in 2008, its initial customers were
Western-based corporations, but Diemer said last year's improved figures also
reflected the first substantial contracts with Chinese national companies,
which "are opening up to business travel management."
— Mary Ann McNulty contributed
to this report.