FCm Travel Solutions of Australia continued rapid expansion in recent weeks with the announcement of its entry into Latin America through a major partnership in Brazil, as well as reported plans to align itself with a large German travel management company.
For multinationals operating in Brazil, the newly announced link between FCm and Flytour--which one consultant said is among the top five travel management companies in the nation--is the latest in a series of developments that are advancing the practice of travel management in Brazil and Latin America as a whole.
FCm selected Flytour to spearhead its expansion in the region; the 32 year-old Sao Paulo-based TMC plans to lead FCm into Argentina, Chile, Colombia, Mexico, Peru and Venezuela. Still owned by its founder and president, Eloi D’Avila de Oliveira, Flytour claims more than $200 million in corporate travel purchases on behalf of such transnational clients as 3M, Avon, Canon, Caterpillar, Deloitte Touche Tohmatsu, Credit Suisse, Ericsson and Wal-Mart Brazil.
Local travel professionals contacted by The Transnationalwelcomed the move. "We corporate travel managers encourage travel management companies' actions like this that aggregate value to the travel management segment," noted Telefonica Brazil corporate travel manager Wellington Costa.
According to Eduardo Murad of the travel and fleet management unit in Siemens Shared Services Latin America, "Flytour is one the greatest TMCs in Brazil and the partnership with FCm will improve recognition, worldwide/regional presence and also the possibility of sharing knowledge and best practices with other FCm partners. It's a trend that TMCs are looking for global or regional partners. It's a dynamic movement in order to have an identity (brand), service level, clients and worldwide/regional standards."
Aim International Management consultant Sam Andraos also offered glowing reviews of Flytour, ranking it among Brazil's top TMCs along with American Express, Avipam Turismo e Tecnologia Ltda., Banco do Brasil, BTI Brasil and Carlson Wagonlit Travel. A number of changes are underway within that group. American Express this month received approval by the Brazilian Central Bank to sell for $468 million its Brazilian card and travel operations to Banco Bradesco. Following the January announcement of a split between the two owners of BTI, HRG and BCD Travel, former TQ3 partner Avipam committed to joining BCD's network while BTI Brasil in February said it would join HRG's.
Without ignoring the obvious trend of global travel management consolidation, Aim's Andraos also suggested the expected reduction or elimination of airline commission payments in Latin America would further accelerate change in the region. "As soon as airlines announce no commissions in Brazil, we will see an avalanche in the Brazilian market. Flytour is already set up for that and already sells transaction fees. It's very admirable, because they were not afraid of doing the right thing, even if it was not yet the common practice. Once that commission issue is resolved, travel management in Brazil has all the tools and the knowledge to be at par with any market around the world."
Andraos said one remnant of a bygone era--at least in the view of some--is an extraordinary emphasis on relationships. "Unfortunately, until recently, choosing a TMC in Brazil might have been based on who your cousin is. Multinational corporations have no problem with that part of the culture changing, but local corporations will," he said.
Recognizing such sensitivities was one element of FCm's strategy in entering the country. According to a prepared statement by FCm Travel Solutions global CEO Anthony Grigson, "Brazil is one of the fastest growing economies in the world. However, the business culture in Latin America is very different to other regions and is built around personal relationships and two major languages. It is, therefore, vital for us to have the region managed effectively by a local leading specialist travel management company."
Siemens' Murad agreed with the approach. "As mentioned, the Latin American market is different from the other markets, and only nowadays the TMCs are realizing this fact. The personal contact, the different cultures, politics, currencies and also geography are unique, and have to be well-known by the TMC if they want to reach this market successfully."
Meanwhile, FCm offered no comment on a Business Travel Newsreport indicating that it was in the throes of negotiating a partnership with Germany's DER Business Travel. Like the Brazilian Flytour agreement, the German deal does not involve an exchange of equity, according to the report. Grigson in the past has been critical of partnerships that do not involve an equity stake; FCm general manager of network development Charles Gregory this week elaborated on those sentiments in comments sent by email.
"As it is not commercially viable for FCm to have an equity stake in every partner worldwide, the group prioritizes equity-based opportunities in key strategic markets," wrote Gregory. "In other markets, FCm's partnerships are created through long-term contracts [that] encapsulate everything from our global operating standards to preferred product/service offerings and alignment in terms of business process and system automation, so FCm considers them to be far more in-depth, and beneficial to clients, than 'alliances.' In all markets, FCm has chosen a strategic partner that could present our business with an equity opportunity in the future, should this be to the benefit of FCm, our partner and our clients. In some markets, the best partner is presently not for sale, but agreeable to a partnership agreement with FCm. In these cases, and in our clients' interests, we have entered into a partnership agreement with this entity. Flytour would be indicative of this arrangement."
FCm's global expansion also recently included accelerated growth in India and the United States.