London – The Association of Corporate Travel Executives at its global conference here last week advocated that travel buyers prepare for two threats to worldwide business travel: airborne contagion and traveler security. As a result, ACTE has launched two task forces and is working with health authorities to educate travelers and their managers.
Referring to mounting fears around avian influenza, ACTE president Greeley Koch said, "SARS cost the industry ?8 billion and we do not want to see that happen again. Our position is one that is based on preparedness, not panic."
Task force leader Mark Williams, managing consultant for IBM Business Consulting Service, said, "Traveler tracking in place for security reasons can be set up to handle health issues. Also, if we know someone is sick on an aircraft, how can you alert other passengers? We have to work in conjunction with the airlines to make that happen."
ACTE is looking at disinfection standards that such travel suppliers as airlines and car rental companies could adopt. ACTE officials also discussed the findings of a recent survey of U.S. members in which 70 percent of respondents said they favored legislation that would allow health authorities, including the U.S. Centers for Disease Control and the World Heath Organization, to access traveler information in the event of a health scare, such as the discovery of avian influenza in an airline passenger. "It would not be full passenger name record information or credit card information," Williams said. "It would just be names, seats and phone numbers so these people can be contacted."
Meanwhile, 25 percent of respondents said they have contingency plans in place to deal with a pandemic, including 18 percent who said their companies are stockpiling antiviral drugs. "Our goal is to lower the number of companies who have no plans in place," Williams said. A similar survey is being planned for the European membership.
ACTE also launched an EMEA task force to increase traveler security awareness. Led by Spencer Hanlon, managing director of AirPlus International, the task force plans to publish a white paper expressing ACTE's views to regulatory bodies and government authorities.
Heightened security "is resulting in a greater burden on processes and policies," Koch said. "The United States sets policy and there could be possible retaliation by other countries to those restrictions. It is unknown how much business travel could be impacted."
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Ann Barrett, managing director of passport services for the U.S. State Department's Bureau of Consular Affairs, praised ACTE to the nearly 1,000 delegates for "focusing our attention on privacy," as the U.S. government prepared next-generation passports. "In new e-passports, we are using anti-skimming devices on the front cover and along the spine to protect data on the chip," she said, referring to security concerns raised about the adoption of radio frequency identification technology. "We also use basic-access control. We have done everything we can to make sure the document has integrity and that the chip cannot be read from any distance." She acknowledged that basic-access control prolongs the time necessary to read documents, "but we are now working on how we can reduce those times."
Barrett acknowledged confusion stemming from new passport formats, but assured delegates that "all documents that are valid and acceptable should remain so for the life of the document." She said the State Department had finalized new e-passport rules and planned to issue them in a few days.
Meanwhile, Gus Hosein, visiting fellow at the London School of Economics, senior fellow at Privacy International and an advisor to the American Civil Liberties Union, said securing passports around the globe represents "a conflict between principle and practice. What sounds like a fantastic idea for your national interests may not be a good idea internationally." He objected to European Union passports requiring fingerprints—a suggestion but not a mandate from the International Civil Aviation Organization—and the United Kingdom's plan to compile both fingerprints and iris scans in a national database. "Biometric technology will not work on an international scale," he said. "With billions of people registering, the system will fail." Hosein also favored the theory behind a registered traveler program, but questioned its efficacy. "Understanding someone's background won't necessarily help us understand who is a terrorist," he said.
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Delegates received an update on European Union travel industry initiatives from Geert Goeteyn, partner with law firm Howrey. Goeteyn said the European Commission has recognized the positive results of International Air Transport Association tariff conferences, "though the process is not ideal." Those conferences allow airlines to discuss pricing in the context of interlining agreements, but have been criticized by some as anticompetitive. "The Commission has indicated that airline alliances provide enough coverage on short-haul routes such that interlining no longer is important enough anymore to justify the tariff conferences," Goeteyn said. "But on long-haul routes, with alliance coverage still patchy, it is not the same view." He said the commission in mid-November would again review the IATA tariff conferences.
Regarding U.S.-E.U. Open Skies discussions, Goeteyn said, "there is room for some optimism because both sides are more realistic now" compared with stances in earlier, failed negotiating sessions. E.U. regulators acknowledged that a complete open aviation area will not be accepted by their U.S. counterparts, at least not immediately. E.U. also will not insist on cabotage, which would allow European carriers to operate between two domestic U.S. airports, and has recognized U.S. desires to expand Open Skies across the region, including London Heathrow. Only two U.S. carriers—American and United—now are permitted to fly nonstop from Heathrow to U.S. gateways. There are some indications that U.S. regulators may agree to a phased increase in the cap on foreign ownership of U.S. carriers.
Willie Walsh, British Airways' new CEO
(see story) and a conference keynote speaker, said he, too, is optimistic agreements will be reached between the United States and the European Union, possibly within the next 18 months. "This could trigger a move toward consolidation on either side of the Atlantic, or even across it," he said.
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Lufthansa German Airlines has committed "to give access to all fares for the travel programs which we are part of," said Marianne Sammann, general manager of global corporate accounts. "We make sure that all prices are available through any online booking engine," used by corporate clients and their travel management companies. The airline also has agreed to handle fare loading amid increased buyer expectations. Sammann also said Lufthansa, in conjunction with global travel agencies, is building "direct-connect options" that would provide guaranteed content "regardless of any solutions found with global distribution systems." Meanwhile, Lufthansa is piloting customized information portals for corporate clients and expects a wider rollout in mid-2006.
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A debate on the relative merits of traditional global distribution systems and the global new entrants saw no punches pulled on either side. Insisting on relabeling the GNEs as LTDs, or limited travel distributors, a panel of three senior GDS executives warned the entrants ultimately could prove more expensive, despite of their lower fees. "They will fragment content and workload," said Sabre chief counsel David Schwarte. "By making the process more complicated, they make it more expensive. Who bears the cost for doing that? You do."
Cendant Travel Distribution Services group vice president of strategy Kurt Ekert said GDSs were more worried about each other because new entrants represent an "inferior value proposition."
PhocusWright analyst Norm Rose said GNEs would enable buyers to negotiate with airlines to reduce price by reducing the carrier's distribution costs.
Rose added that despite the migration of many functions to lower-cost Web-based architecture, "the reality is GDSs still run very large mainframes running on very old systems." Rose said buyers would not be put in a situation of going either with a GDS or a GNE. Instead, GNEs will act as aggregators, with GDSs as one of their sources.