Amex: Mgmt. Goes Global, Online Fulfillment Turns Profitable

Global Corporate Services group president Ed Gilligan, speaking yesterday with Business Travel News about American Express' new senior management structure--announced earlier this week--said now that Amex has "really gotten fulfillment down to a science," profitability of online transactions is higher than manual transactions. He added that online bookings, as a percentage of total bookings, grew to 6 percent in early January, up from just over 1 percent in December 2000. "And when we look at our top 20 accounts, it's between 40 percent and 80 percent," Gilligan said.

Global Corporate Services earlier this week unveiled a new senior leadership structure that favors two global lines of business over geographic regions, Global Travel and Global Commercial Card. Global Travel encompasses the corporate travel globally and consumer travel outside the Unites States and Global Commercial Card includes corporate card, purchasing card, global information services and product development. "Now, I'm not the only person with a global job," said Gilligan. "A year and a half ago, I took responsibility for the global card and travel business, and now in this latest change I want to push global down. What we're trying to do is bring like functions together."

As part of the restructuring, American Express announced a slew of position and title changes for senior managers, including the appointment of 15-year Amex veteran Steve Squeri to president of Global Commercial Card, replacing Jud Linville, who moved over to lead the company's core credit card operations unit. Also reporting to Gilligan is 20-year Amex veteran Charles Petruccelli, previously president of Corporate Services International, who now runs Global Travel.

As part of the realignment, Amex created a dedicated business unit, called Global Customers, for 50 of its most globally oriented clients, most of which have both corporate travel and commercial card relationships with Amex. The leader of that group, for whom Amex now is searching, would report to both Petruccelli and Squeri. "Very few companies are set up to take advantage of a global structure like this," Gilligan said. "Many of our customers are still multinational, meaning decisions on card or travel are made by a group of people, and sometimes independently, throughout the world. These 50 have the ability and the desire to be managed globally, and I think this tough economic environment means more customers will be ready for a global approach over the next year or two."

Gilligan said American Express also has globalized its development team, shifting away from a practice of designing new products first for the United States and later for the rest of the world. Part of that effort includes the expansion of online fulfillment services, part of Amex's Interactive Travel division, to additional countries. For Interactive Travel, Gilligan said, "the stars and moons are aligned." On Earth, 2001 was "the most horrible of years, but a character-building one," he said. "As bad as it was, our travel business even made money in 2001. After Sept. 11, we set a very conservative forecast for the fourth quarter and volumes actually started coming back faster than we expected. It's hard to be in the forecasting game right now. While I see no reason to build any optimism into a forecast at the moment, the other side of me says it will be a far better year, of course that's off a low base." He said American Express is anticipating companies will spend 10 percent to 15 percent less on T&E this year than they did in 2001. Calling that "a conservative forecast," he said "it has to come back a lot from where it is right now to get to minus 10 percent, but each month is better than the one before."