Buyers Face Hurdles On European Cross-Border Track

Cross-border satellite ticket printing in Europe will become a reality in the next few weeks. Sources say the International Air Transport Association will shortly license a company in Oslo to issue air tickets via STP for its staff in Brussels and Frankfurt. The company, which has not been named, will use Amadeus Procon as its computer reservations system.

An application from another corporate also is in the pipeline. "There are two applications in process, and we foresee no difficulties with either of them," confirmed Bob Gesinus, IATA director of agency services for Europe, Africa and the Middle East.

So much for the good news about cross-border STPs. In theory, these will allow any company in the European Union, plus Norway and Iceland, to issue tickets from one host location for all employees in the region (<I>BTN Europe</I>, September). The IATA enabling legislation, which took effect on Aug. 1, could allow large economies of scale if corporate buyers need only one business travel center for the whole EU. It also will allow easier consolidation of management information and enforcement of corporate travel policy.

However, while Gesinus claimed "there is no problem whatsoever" with the logistics of cross-border satellite ticket printing, more and more buyers and agents are expressing doubts about whether this is a viable pan-European management solution.

Although Gesinus said that CRSs are not encountering problems with the implementation, one of the major CRS players told <I>BTN</I> confidentially that it was facing difficulties. "There are several outstanding issues to be resolved," said an official at the CRS. "These include how tickets are refunded and voided and how data is channeled to the relevant back-office systems. Furthermore, only one host is permitted for each STP. If various travel agency offices are doing work for a large client, then they may need more than one printer."

Another person with doubts is Glyn Farrell, president of the International Business Travel Association, and personnel travel and facilities manager for Lloyds Bank of the UK. Farrell, who sits on the IBTA liaison subcommittee with IATA, believes that cross-border STPs will catch on but is worried about certain aspects of the legislation. In particular, he is unhappy about the ruling that tickets may be issued only for departures from the country where the STP is located.

Farrell is considering appealing to the European Commission, which has a political interest in easing travel restrictions within the EU. Meanwhile, he is seeking clarification from IATA on another bone of contention, which is whether special fare tickets, such as consolidated and net fares, can be distributed internationally via STP.

Amex consultant John Levine has found these doubts confirmed by clients. "We have been looking at this issue with several customers, and not one of them has moved forward on it positively so far," he said.

Levine has more additions to the list of problems. Under the current rules, an STP ticket is issued in the local currency at the point of delivery, but the agent settles with the national bank settlement plan of the host location in the host currency. If the client settles with the agent at the point of delivery, then the settlement currency switches across borders yet again, making it prone to foreign-exchange fluctuations.

Yet another difficulty is how the client at the STP location handles travel arrangements that can only be made locally, such as domestic rail tickets and passport and visa services. The answer, Levine said, is that the client will need some form of local backup, which erodes the economies of consolidation the client is looking for in the first place.

Despite all these objections, Levine is confident that cross-border STPs will be useful for some clients, but added that each must consider carefully what they want from such an arrangement and whether there is a better way of achieving that goal.

In addition to the IBTA, the Association of Corporate Travel Executives also is considering lobbying IATA to secure changes to the STP legislation.