Business Travel News has named Peter Sijbers, global commodity manager for air travel with the technology giant Philips Electronics, International Travel Manager of the Year for 2006. Chief among his accomplishments last year was his pilot of the first SkyTeam airline alliance corporate contract, for which he insisted on a single point of contact for active monitoring.
Sijbers treats travel with what he calls a value chain management philosophy, which involves looking beyond savings to other travel functions, such as risk and crisis management, data protection and even reciprocity, trading Philips products with the company's suppliers.
BTN presented the award to the Eindhoven, Netherlands-based Sijbers at last month's Association of Corporate Travel Executives global conference in Barcelona. The occasion was particularly apposite as Sijbers is a board director with ACTE, just one example of the considerable energy he puts into advancing the frontiers of travel management both within his own company and in the wider business community.
On the public affairs side, the European Commission consults with Sijbers to get the corporate purchaser's perspective on such issues as aviation sector mergers and acquisitions. He also has led Philips' participation as the pilot customer for the American Express @ Work benchmarking project, and last month set up a European version of the U.S.-originating Travel Service Benchmarking Network, which brings together leading travel buyers to compare notes on such issues as security.
Sijbers made headlines in the past year for negotiating the first global deal with the SkyTeam airline alliance, a deal currently extending to 40 countries and accounting for around $84 million of Philips' $230 million air spend. This would be a remarkable first for any company, but it is all the more noteworthy because of Philips' exceptionally complex travel profile: The company's top 550 citypairs account for only 40 percent of its air spend.
The agreement with SkyTeam, which started in December 2005, dwarfed a two-year, $42 million deal with Star Alliance. Sijbers rejected a common complaint among travel buyers that alliance deals usually work out to be less attractive than selective deals with individual airline members. Philips already had a global contract with its home carrier, KLM, and local agreements with other SkyTeam members, such as Continental Airlines, Delta Air Lines and Northwest Airlines. In the SkyTeam negotiation, Sijbers insisted on a single deal and that "the starting point was that the sum should be greater than the parts."
SkyTeam accepted his conditions and the contract is now overseen day-to-day by a single point of contact within the alliance, Lorraine MacCullum, who is based in London. However, getting the deal off and running was no small achievement. The contract, which is based on percentage discounts off the published fare, included 3,000 commercial terms for different citypairs. Sijbers was able to reduce some of the complexity by clustering citypairs into groups with the same commercial terms, but other factors put more complexity back in. These included inconsistency between SkyTeam member airlines in definitions of fare classes and changes in the marketplace. "SimpliFares was a nightmare for all of us," said Sijbers.
All data is managed through the data consolidation specialist Prism. SkyTeam insists that all contracts must use data gathered by Prism, but Philips had been a Prism customer for years. Prism measures air contract performance, including Philips' compliance with the agreement and savings for the company.
Sijbers and MacCullum review the data regularly to see where they can improve the contract performance. If, for example, the alliance has poor marketshare among Philips travelers on a particular route, it might respond by making a frequent-flyer mileage offer.
The deal includes mutual recognition across the alliance members' frequent-flyer programs, but otherwise Sijbers has been disappointed so far in his aspirations to provide benefits for his travelers. Plans such as a baggage tag to indicate the heightened status of Philips travelers as SkyTeam customers have come to nothing, but there are discussions about producing a co-branded payment card.
Another frustration for Sijbers has been the alliance's inability to secure full anti-trust immunity. In practical terms, this has restricted flexibility for Philips, such as being unable to buy a negotiated ticket that allows the passenger to fly in one direction with one alliance member and in the opposite direction with another.
Most winners of the International Travel Manager of the Year award have been quick to cite their colleagues' performance, and Sijbers is no exception.
Led by global supply market manager for travel John Guarneri, himself a BTN Best Practitioner in Travel Management in 1997 (BTN, Aug. 11, 1997) and 2002
(BTN, Aug. 26, 2002), Sijbers also has colleagues who handle such subcategories as corporate card, hotels, meetings, car rental and travel management company.
Sijbers has been in travel for 25 years. He joined Philips in 1986, initially working for its in-house travel agency. In 1998, Philips closed the department and outsourced travel management to Rosenbluth International. Sijbers switched to Rosenbluth as manager for the Philips account but returned to Philips eight months later to help look after travel from within the purchasing department. Today, he is responsible for all airline-related management and contracting, plus global distribution systems.
Sijbers said the SkyTeam deal is delivering substantial fare reductions for Philips but, ironically, he no longer is measured internally in terms of year-on-year savings. The travel team has argued successfully that savings have to be balanced against traveler comfort and time-efficiency, which therefore demands a more complex evaluation. "Travel is an enabler to your core business, which is how it should be valued," said Sijbers. "Year-on-year savings are short-term."
Sijbers and Guarneri also demonstrated that annualized savings do not take into account factors beyond their control added to the base fare, such as card merchant fees and fuel surcharges. As a result, Sijbers' performance is measured principally on two other indicators: how the company's fares are benchmarked against those of its peers and compliance with policy.
The terms of these measurements are included in an annual plan called a project brief, which is scrutinized by the internal audit department. "It is a complete audit. There's no escape," said Sijbers.
Sijbers' role extends beyond the mission of containing travel costs. Security is key, both in terms of personal safety for travelers—with substantial time spent on tasks such as preparing crisis plans—and in terms of data protection. Unlike many companies, Philips has a full-time data privacy officer. All contracts handled by Sijbers include supplier commitments on data ownership and transfer.
Generally, Sijbers feels he has made good progress in framing contracts to position Philips, rather than the supplier, as the data controller. However, he does have some areas of concern. "What worries me is the global distribution systems," Sijbers said. "I don't know what they are doing with our data. Not one TMC can tell me what the GDSs do with our data either."
Sijbers also is concerned about potential GDS deregulation in Europe, a controversial issue because of the so-called double dominance of Amadeus and its airline part-owners. He has therefore signed Philips up for C-FARE, the group lobbying against full deregulation. "Corporates have always been confronted with the end result. It is time we took a more active approach," he said.
The other data issue that vexes Sijbers is governments gaining access to passenger name records. He has spoken out against the United States doing this
(BTN, Sept. 11) and is also unhappy that the European Commission is considering following suit. "You can get away with an awful lot of things by citing security reasons," he said. Sijbers would want any proposal to include strict conditions on such issues as storage of and access to PNRs.
Fortunately, he is in as good a position as any travel buyer to have his voice heard by Brussels. The European Commission consults him regularly, and he has given views on such issues as the merger of Lufthansa and Swiss.
Sijbers said that investing in engagement with other organizations and signing up as pilot customer for new projects earns Philips influence in return. One example of this was when the company became a launch customer last year for the American Express @ Work benchmarking program for its top worldwide customers, which are known as Global Business Partners. Philips uses Carlson Wagonlit Travel as its TMC for 70 percent of its travel spending, but Amex is its global card supplier. The project came at a convenient time for Sijbers, as his assessment was moving from savings to peer comparisons.
"We worked to make Amex understand how we make our measurements," said Sijbers. As a result, for what he describes as taking "all the pain," he ensured the tool met Philips' needs in this area. Sijbers generally is pleased with the performance of American Express @ Work, but feels it needs improvement in its data for Asia/Pacific.
Asked what advice he would give to other travel managers, Sijbers turned once again to the theme of establishing a broad hinterland of responsibilities.
"If we continue to act either as if we are running a travel shop or pursuing purchasing objectives alone, then travel managers will become dinosaurs," Sijbers said. "If we can step beyond these boundaries, then we can find ways to increase our value to our companies. Travel managers have a lot to offer, but they are not always aware of it."