Charles Petruccelli
American Express Global Travel Services president Charles Petruccelli offered several salient quotes during his speech at a PhoCusWright conference in Hollywood last week. Addressing economic doldrums, he said, "It does not make sense to stop business travel in times of crisis, for if you do not visit your customers, your competitors will." Regarding what he is calling a transformation of American Express Business Travel away from being a transaction processor, he said, "We're not a business travel agency anymore. We are a business process manager, helping corporations to manage and optimize their spend with new approaches and greater choice." Because the company offers capabilities and solutions for expense management, benchmarking and consulting, among other services, Petruccelli said, "Our competitors here are more the Accenture, A.T. Kearney, Deloitte, IBM and the likes rather than traditional travel management companies." Petruccelli also answered questions from the audience and panelists about global structure, mergers and acquisitions, the importance of global distribution systems, and American Express Company's recently approved bank holding company status as well as its card partnership with Carlson Wagonlit Travel. Those queries and his answers follow.
Are you in an acquisition mode to acquire business travel companies?
I believe we have reached a point now where it's not particularly essential for us to acquire business travel companies. It may be tactical in a given market to gain share more rapidly.
Brazil is a key market in any company's strategy. A couple years ago American Express announced it was [transferring] its TMC operations to a large bank in Brazil. [The bank, Banco Bradesco, later sold the American Express business travel operation to Brazilian TMC Flytour.] Is that [strategy] specific to Brazil or would you do that in other markets?
Brazil is a very important market. We were not doing well in Brazil. We were structurally not performing well as Business Travel in Brazil. We have a strategy across the world to grow three ways: organically, through acquisition or through partnership, depending on our capabilities. In Brazil, we were better off developing a partnership with our partner Flytour because they have the local knowledge and expertise. What is important is that we connect our platforms together and provide seamless service and service level agreements with customers.
What does the bank (holding company) status do for the travel business?
It means that we will be under the regulations, which will change substantially the way we provide information and data [and] will make us quite different from the other competitors of the travel management company. From a business point of view, it doesn't make much of a difference. We in the "blue box" as opposed to the card business are not in requirement of cash. We are cash positive. The company doesn't have any problem with cash, either. It was important for the company to make that move because other competitors are under the bank holding act, and so we want to ... have the same access, if we wanted to, to run our card business.
Is the American Express-CWT credit card partnershipa precursor to something more involved?
There is a preferred card agreement. Does that upset me? Absolutely not. I think it's great that CWT business travel customers are carrying the American Express card because it is my name and hopefully my name will ring a bell to them, and when there is a bid, I may be able to win that bid ... knowing there is a complete Chinese wall between the card business and the travel business and I don't have any access to the card data at any moment. I prefer that the CWT clients carry the American Express card instead of a Visa or MasterCard card.
Sabre and United announced an extension of their global distribution system relationship for two more years. If everyone follows suit, is that a good thing for the industry?
There is no alternative to the GDS (for air) currently in the industry, despite everything we have been hearing for years about alternative solutions. We welcome the fact that they have come together to solve their economic problem over the long term.