Lego Builds Cross-Border Satellite Ticketing Links

<I>Billund, Denmark</I> - Lego has become one of the first companies to adopt cross-border satellite ticket printing and expects to install it in its Zurich office on March 1.

The office will be connected online to the same automated system used by Lego headquarters in Billund, Denmark. Ticketing will be supplied by Maersk Travel in Denmark, one of Lego's two travel agents.

"The direct online connection between Zurich and Billund means the two offices will be looking at exactly the same information,'' said Lego travel manager Else Marie Madsen. "It means that our Swiss office will be able to take advantage of all the deals we negotiate in Billund.''

The International Air Transport Association passed enabling legislation to allow cross-border STPs last August (<I>BTN</I>, Aug. 5, 1996).

Some travel managers have expressed concern that issuing tickets across borders could lose them money if currencies fluctuate. But Madsen is not worried.

"The only problem would occur if the Swiss franc fell against the Danish kroner,'' she said. If that did happen, the answer would be for Maersk to partner with a Swiss travel agency.

Madsen expects the STP connection to Zurich to produce further savings for the toy brick manufacturer, which already saves an estimated 16 percent on its travel bill each year through using an automated system and its own staff rather than paying standard agency fees.

Lego has one of the most sophisticated travel management departments in Europe. In addition to making its own travel bookings, it operates up-front net fare arrangements with preferred airlines, works on a management fee with travel agents and has a private fleet of aircraft.

The firm's travel system, called Corporate Travel Management, is supplied by Copenhagen-based technology specialist Business Travel Consult, whose other clients include the Swedish government and Italian agency consortium The Millenium Team. Madsen has four people working for her in the travel department at Billund.

Travelers communicate their journey requests to the department via telephone, fax or e-mail. A travel employee makes the booking on a computer reservations system and then adds the traveler's profile, which includes seat and meal preferences, frequent flyer numbers, credit card numbers and next-of-kin details. It also lists the traveler's previous trips, future trips already in the system and unused flight coupons, which can be used for construction fares. Madsen estimates that Lego saves about $300,000 annually through keeping track of and incorporating these unused coupons.

While making the booking, the travel team also can select accommodations from its online preferred hotels directory. However, if the traveler has a good reason, it is possible to book a non-preferred hotel. "If the hotel is in one part of the city and the meeting is in another, we have to show some common sense,'' Madsen said.

Once the booking is ready, it is queued to the travel agent, who constructs the cheapest possible fare, issues the ticket and distributes it to the Lego travel department via STP. Lego prefers to let travel agents handle the work because it would otherwise have to pay $25,000 per year for IATA licensing and employ a fares expert.

The travel agents, Maersk and DanTransport Rejsebureau, also are happy with the arrangement, said BTC managing director Brian Ranch, because it allows them to dispense with ordinary telesales staff and put more emphasis on their core expertise, which is fare calculation. "They can concentrate on the things they need to do to survive," Ranch said.

In a situation like this, it is much more logical for Lego to have a management fee arrangement with its agents. The airlines therefore pass all commissions and overrides directly to Lego, which it receives in the form of up-front discounts.

CTM also has a back-office section, which provides management information that can be interrogated any way Madsen wants, including spend by department or individual, by route or by carrier.

In addition, Lego's version of CTM allows bookings on its own airline. Lego has three aircraft, one of which, a 14-seat Falcon, is capable of flying to the group's factory in Hartford, Conn., either nonstop or to the Far East with one stop.

If more than three people book a scheduled flight to the same European destination, the system alerts the travel team, which will charter one of the private aircraft instead. The aircraft's schedule is added to the system, allowing the team to add to the flight anyone who subsequently requests a ticket to the same destination at the same time.

The journeys flown with the private fleet would cost $1 million per year at business-class rates on commercial carriers. Although it costs far more than that to run the airline, which has been operating since the early 1960s, "we do it more for flexibility than to save money directly,'' Madsen said. "But flexibility saves us time, and time is money. We can use smaller airports and fly when we want to.''

Future plans include seeing CTM converted from a DOS to a Windows platform. Lego also is building an intranet, although at this stage Madsen is not considering putting the travel system on it, partly because she is reluctant to let travelers make their own bookings. She believes that the travel department should be responsible for reservations and that travelers should concentrate on their jobs.

This fits comfortably with the prevailing philosophy at Lego, where employees are allowed access to the Internet only if they have a good reason to use it.

Despite these misgivings, Madsen has experimented with self-booking, testing the Travelogix system with five travelers. The test was abandoned after the travelers found it difficult to dial up the modem. "When travelers try something that doesn't work twice, they don't want it any more,'' she said.

But Madsen would like to automate Lego's expense reporting process, which will happen after the group changes its financial systems sometime this year.