WHO Cuts Airline Expenditures By 25 Percent

<H1>WHO Cuts Airline Expenditures By 25 Percent</H1><H3>By Paul Needham</H3><I>Geneva </I>- Sharon Stoler, the World Health Organization's head of travel and transportation, is making her institution's latest round of belt-tightening into an opportunity for negotiating better airline deals, cutting through in-house red tape and launching a computerized travel request and archiving system this year.

The Geneva-based World Health Organization (WHO), a United Nations agency dedicated to tackling diseases and poor health conditions around the world, is currently in a financial crisis prompted by the United States' decision to review or withdraw funding for all U.N. institutions. This is forcing a body that is half funded by 180 governments and half by voluntary contributions to seek new ways to reduce travel spending, in addition to a gradual consolidation of its travel costs out of the head office.

"This situation makes our budgeting very difficult, and we are doing everything we can to save money," Stoler said. For example, WHO employees generally stay in very moderately priced three-star hotels, which are negotiated locally by city offices rather than through travel agencies. Car rentals are very rare due to use of staff cars or local infrastructure for airport transfers and field trips.

Stoler, who took over as travel manager in late 1989, launched the organization-which is Carlson Wagonlit Travel's largest Swiss client-on its first steps toward consolidation in 1990-91 by concluding air travel deals with five international airlines. By consolidating volume, she obtained business-class travel at less than business-class rates-practically guaranteeing a high level of staff compliance, because staff had traveled economy class until then.

Employees who fly on one of the five selected airlines get to fly business class, but if they choose to fly with another airline, they have to pay the difference if they want to fly business class.

Despite the agreements, WHO has an open policy of using any airline according to circumstances and need, Stoler said.

The five airlines, which Stoler preferred not to name, now account for up to 90 percent of WHO staff flights out of Geneva. Last year, WHO's Geneva office had an air travel budget of more than $18 million, which was half of WHO's total world budget of $36 million. "We are expecting a decrease in that figure this year, although the number of flights will probably stay about the same," Stoler said.

WHO has set up a front-end system through which it pays reduced fares rather than gaining the more-common post-travel rebates, Stoler said. As a result of these agreements, WHO has saved more than 25 percent on air fares.

WHO's head office paid for 14,000 trips last year, half of them taken by its 2,500-person staff and half by non-staff people, such as medical experts who were conducting WHO business.

Because of the nature of WHO's workload, flight patterns vary tremendously, from intense, short-term use of routes to regular but low levels of flights to particular destinations. Because no one can predict when a health crisis will occur, advance booking is very difficult, which means air travel agreements have to be on a region rather than a route basis.

"We look for airlines which cover the regions which we want to cover," Stoler said. "We need global agreements that cover broad areas and are not route-specific."

The major world destinations for WHO are Africa and Asia, which each account for 25 percent of trips, followed by North America and Europe, each with a 20 percent share.

Value Plus Flexibility

"We do not only work in terms of money but also in terms of flexibility and service," Stoler noted. "People often have many stops on one ticket, so we need endorseable tickets, and we need last-minute deals." WHO has obtained flexible tickets by mixing airlines through interlining, she added.

At the same time, "flexibility is no longer our main priority," Stoler said. "We may go to a situation where nobody flies business class. We will try to use consolidators for tickets but renegotiate the conditions, such as minimum stay." The cost of a flight from Geneva could be halved to $2,000 simply by eliminating the seven-day minimum stay requirement, for example.

Given the pressure to save, WHO has adapted its airline agreements since the start of 1996 to try to build in fewer stopovers, more advance planning wherever possible and greater use of tickets from consolidators.

Day-to-day WHO travel administration is handled by a Carlson Wagonlit in-plant that has grown from 12 to 20 people since the agency won the contract from Thomas Cook in 1990 shortly after Stoler took over as travel manager. The agency handles all bookings and provides management information, and has introduced a system under which bills from regional offices are forwarded to Geneva for approval, payment and consolidation into travel management reports. "An in-house reservations department is an antiquated idea from 20 years ago," said Stoler.

Seeking More Data

Stoler's overview of travel costs is improving. The agency now sends printouts broken down by categories such as airline, world region, ticket cost and whether the ticket is discounted. She is hoping to eventually receive this information on disk "so that I can break it down or do trend analysis when the queries come in," she said. "I want to see where staff in country offices are flying to, who they are flying with, which are the preferred partners."

Although WHO still is in a traditional commission and rebate relationship with Carlson Wagonlit, the option of moving toward fees is very much open, Stoler said. "We have a very transparent relationship with Carlson Wagonlit," she said. "Should the market change with reductions in commissions, we would be open to changing to a fee basis at that time. In return, I would expect the agency to provide accurate cost figures. The problem, however, would be that we do not have a travel budget as such."

WHO aims to slash through red tape this year by simplifying and computerizing travel request procedures. In the past, each approval required a nine-page document with at least three signatures, and the travel agency could not issue tickets without that authorization. Since Jan. 1, WHO has been able to get a ticket issued before getting in-house approval.

Stoler hopes to have an in-house e-mail system on a LAN network in place by June 1, and an electronic archiving system by the end of the year to cut paper and save staff time.