<B> Inside Track</B>
<b>Amex: Fare Hikes Keep Coming</b>
American Express said last week that of the past three years of airfare hikes to hit corporate travel budgets, last year's was the worst. The typical 1997 business airfare was up 16 percent over 1996, compared with a 9 percent jump in 1996 and a 3 percent increase in 1995. "With additional business airfare increases expected in 1998, it will be more important than ever for companies to step up their travel management efforts," said Eric Altschul, vice president of Amex Corporate Services' consulting services group.
<B>EC Decision On Alliances Delayed Again</B>
According to reports, the European Commission isn't likely to make a decision on transatlantic alliances, particularly the proposed American Airlines-British Airways pact, until at least next month and perhaps as late as April. The Commission said it would prefer not to single out any one alliance, indicating that it may require slots to be released not only at London Heathrow, but also at other European airports where alliances dominate, such as Frankfurt. Washington is not expected to decide on AA-BA until September or October.
<a name="story3"><B>Mitchell Gains Support for BTC</B>
Despite the recent announcement that the Business Travel Contractors Corp. is no more (<I>BTN</I>, Jan. 12), its founder and president, Kevin Mitchell, announced last week that the airline competition advocacy group, the Business Travel Coalition, will live on. Mitchell previously had said the BTC would continue if it received support, which it did in recent weeks from a half-dozen companies. "I'm back," said Mitchell, who will serve clients as a consultant in three areas: big picture cost reduction strategies, globalization of the travel management function and enhancement of competition in key markets with participation in the Washington competition debate. Mitchell said the BTC will have a new Website up and running within a few weeks.
<a name="story4"><B>Thor Agencies Consider Consolidation</B>
In a move designed to bring travel agencies together to gain greater economies of scale, Louisville, Colo.-based consortium Thor Inc. is exploring the concept of reverse triangular mergers for its travel agency members. A new limited liability company would be created by Thor, outside investors and several agencies. Through a reverse triangular merger, participating agencies can protect themselves from hidden liabilities, while a rollup of the agencies creates a wholly owned subsidiary. "Travel agencies that want to join give the subsidiary their stock, and in return they get stock from the parent company," said John Baker, Thor's CEO. Baker said if a rollup is to occur, "a certain level of profit" is necessary and "then we can bring in smaller companies." When Thor approached agencies at its January member meeting about the idea, Baker said, agencies between $15 and $50 million appeared likely to participate, and "interest has been from some as high as $75 million." To make the concept work, Thor is putting a $1 billion figure on the proposal, the amount advisors said the venture will need to go public. One of the prerequisites of participation is that agencies sign up to use BOLT, Thor's data management product.
<a name="story5"><B>Stratton Rearranges Top Management</B>
Stratton Travel Management kicked off the new year by naming Terry McCabe president. McCabe has been with the $75 million agency since 1979, and became a partner and COO in 1994. McCabe replaces Paul Leyh, who left Stratton Travel to join US Airways as a national sales manager. "Paul had been with American Airlines before going to a travel agency and I think he found he really loved working for the airlines," a Stratton spokesperson said. "US Airways was an offer he couldn't refuse." With Leyh's departure, company founder and CEO Mark Stratton and McCabe will split the partnership. In her new role, McCabe has taken over marketing and customer relations. Assisting her is newly appointed vice president of sales and marketing, Julie Breur, formerly director of corporate sales.
<a name="story6"><B>Starwood's Sternlicht Stars At Corporate Travel</B>
Starwood chairman Barry Sternlicht will give the keynote speech at BTN's Corporate Travel World during lunch on the second day, March 3, at the New York Hilton. Sternlicht will discuss hotel negotiating and consolidation
The National Business Travel Association's Foundation for the Future will host a dinner at the Waldorf-Astoria at the end of the first day of Corporate Travel World. NTBA president Mark Johnson and Frank Olsen, Hertz Corp.'s chairman of the board and CEO, who serves as chairman of the Foundation, will deliver speeches. The sold-out event celebrates the Foundation's accrual of $2.6 million in funding to date for its Institute of Business Travel Management (<I>BTN</I>, Dec. 8). Recent contributors include Delta Air Lines and Woodside Travel Trust.