In a new commitment to its Corporate Travel Department program, the Airlines Reporting Corporation is taking over the annual CTD Conference, reviewing the CTD application process and developing new products and services to benefit corporations and airlines. ARC vice president of sales and customer relations Mike Premolast month revealed the changes following the close of the sixth-annual gathering here.
"ARC has been ambivalent about the CTD program; we're not going to do that anymore," Premo told 45 corporate representatives and 20 sponsors/speakers during a keynote address. With their approval, Premo told attendees, ARC wants to run the 2007 event and had already hired a manager to "support the customer experience at this and other ARC meetings and working groups." During a closed-door session later in the conference, the attending CTD representatives accepted Premo's offer. The seventh-annual CTD Conference will again be held the week after Thanksgiving, most likely near ARC's Arlington, Va. headquarters, Premo said.
Andy Menkes, who earned the first CTD designation while managing travel for Republic Bank and now heads Americas sales for Eos Airlines, organized the first five CTD conferences as an extension of his travel management consulting practice. After selling the practice to HRG and joining the agency's consulting practice last year, Menkes said professional ethics prompted him to turn to Corporate Solutions Group president Bob Langsfeld to run the 2006 conference at Sonoma.
As part of its new commitment to corporations, Premo said ARC is "evaluating our entire application process." The process involves much paperwork, training and guarantees. Once the application is complete, the approval process can take up to 90 days. But just completing the application has stymied some corporations.
ARC began the CTD initiative as a limited pilot program in 1998, but lifted the restrictions a year later. Adding 10 or so new CTDs each quarter, ARC said 207 corporations held CTD accreditation in 2006. But only 140 or so were using the designation, Premo said. Growth in the program slowed in 2006 as companies waited for the global distribution system content issuesto be resolved so they could factor the new costs into business plans. Proponents of CTDs point to control and financial gains from collecting all commissions and overrides, whether they outsource all aspects of their operations, or manage them internally. Critics question the savings.
Premo declined to reveal more about the new services under review, but for the past two years, ARC executives and clients such as Wal-Mart global travel services director Duane Futchhave discussed the need to better meet the global requirements of corporations through multi-currency, multi-national and multi-channel settlement options.
"We want to be lean and less mean," Premo said. "We need to evolve more--not technically because we're very good--but culturally. We were the watchdog; that's what we did." Now, ARC needs to be more innovative and responsive, he suggested.
ARC has reduced its technical and processing costs for core reporting and settlement to "as low as can be expected," Premo said. In 1992, it cost airlines 45 cents to issue transactions through ARC; today that figure is less than 20 cents, with the largest carriers paying just 17.1 cents per transaction, in addition to their flat monthly fees. ARC also has reduced fraud in the industry, from $34 million back in 1992 to less than $2 million on $80 billion of volume in 2006.
ARC also has worked to speed data and payments to carriers; its expedited reporting results in a delay of no more than two nights. "One Big Six airline reported a $35 million to $40 million reduction in refund/void accruals the month" after the new reporting was implemented, Premo said. However, this reporting reduces opportunities for corporations to change and void tickets, attendees noted.
The costs are so low today, Premo said, that "I'm going to make the argument that through their own Web sites, sales should be settled through ARC. Why shouldn't they take advantage of the $80 billion we already settle for them?"
The number of participating carriers is also on the rise with 152 as of Dec. 1, Premo noted: "Hopefully, we will bring in more international and low-cost carriers into the system" and double the number of carriers for which ARC serves as the settlement house.