British Telecom Reclaims E-Tickets

<B>British Telecom Reclaims E-Tickets</B>

<B>Headquarters Location:</B> London, U.K.

<B>Air Volume:</B> $52 million

<B>Total T&E:</B> $157 million

<B># Employees:</B> 120,000

<B>Agency</B>: BTI UK

<B>Innovation:</B> Cross-checking database process ensures refunds for e-ticket flights not flown.


Some companies save big travel dollars with major structural changes, such as travel agency consolidation or automating their purchasing. Others opt for abrupt but drastic methods, such as downgrading from business class to coach. Yet, not all innovations need be earth-shaking to make a difference. There are many smaller improvements a company can make that produce significant budget gains without disturbing the delicate ecology of a mature travel program. The e-ticket reclamation program adopted by British Telecom (the United Kingdom's third largest corporation) is a perfect example.

Developed by its retained travel agency, BTI UK, the program has saved the company $65,000 in the past year. Even more impressive is the return on investment: BT paid BTI an initial outlay of $800 for the service and the amount of employee time it takes up also is minimal. E-ticketing volumes remain low in the United Kingdom but they are growing, especially for companies like BT, which have a relatively large amount of domestic air spend.

Using e-tickets makes much more sense on domestic routes (hence its popularity in the United States), because passengers still have to carry a paper record of the reservation for international flights. Most of the U.K.'s new breed of low-cost carriers employ e-tickets, but the number of conventional airlines that offer them remains a handful. However, British Airways is among the carriers that do, and BTI has developed a method of tracing unused e-tickets on the U.K.'s major carrier.

The concept is simple: BTI keeps a database of all the e-tickets it issues. The program it has written accesses the BA database through Galileo and asks it to confirm whether each ticket on the BTI database has been flown or not. BA responds with either a 'yes' or a 'no' or a 'partial' in the case of complex itineraries. In the case of tickets that have not been fully used, BTI goes back to its database and cross-checks whether the ticket holder has claimed his or her refund.

More than 30 clients have signed up for what BTI calls its E-Ticket Reclaim program. BTI claims these clients have saved just over $1 million between them over the past 12 months, with BT one of the largest recipients. E-Ticket Reclaim has proved a useful tool to BT travel procurement manager Paul Cleveland because, like many of his peers, he has discovered that travelers are much more liable to forget to reclaim e-tickets than conventional ones.

However, BTI's work has to be matched by a financial audit within BT to prevent travelers from being compensated twice. The reason is that BT employees put all travel transactions through their American Express corporate card, which they settle up individually and then claim from the corporation. Employees sometimes receive reimbursement before traveling, but if they subsequently cancel the trip, the airline refund is paid through their card. BT therefore has had to devise a process that ensures this refund is detected and passed on to the company. It is a small point but one that some corporations miss.

Cleveland regards the reclamation program as important not only for the money it saves now, but because he foresees e-ticketing becoming central to BT travel strategy. The company is embracing e-commerce for its entire procurement range and shortly will be piloting a travel self-booking system--still something of a rarity in Europe. Getting rid of paper tickets will help make the automated environment a genuine time-save for travelers.

"This will give us an electronic one-stop shop," said Cleveland. "At the moment, the traveler has to wait for a ticket to be issued even if they purchased it instantly through a self-service res system. This is highly inconvenient for many of our travelers." Another inconvenience is collecting tickets on departure for tickets booked on short notice--and it is one that is becoming expensive. Beginning April 1, BA will levy a charge of $40 on tickets on departure where e-ticketing is available as an alternative.

Cleveland also sees e-ticketing as the key to cutting costs with both his preferred agent and airline. Automating reservations and ticketing will cut processing costs on the 30,000 transactions BT puts through BTI each month. Similarly, Cleveland thinks it could help BT move closer to BA. "If we are going to have a closer relationship with BA, then 60 to 70 percent of our business could be with the airline, so we will potentially be buying a lot more e-tickets,'' said Cleveland. "If we grow BA's business and reduce their costs through e-tickets, I would expect them to share their savings with us.