Monthly Archives: March 2017

Privacy Shield Alive For Now As Europe, U.S. Set Annual Review

A European Union commissioner said Friday that the first annual review of the Privacy Shield data protection framework would take place in September, supporting optimism for the scheme’s prospects. Uncertainty had been brewing as the European Commission threatened it would dismantle the program without reassurances by the Trump administration.

The review “will be an important milestone where we need to check that everything is in place and working well,” said European Commissioner for Justice, Consumers and Gender Equality Věra Jourová during a Friday appearance at the Center for Strategic & International Studies. “This first review will be crucial to continuing this mechanism. We need to cover several important topics. One will be whether or not there are positive or negative changes in the American legislation.”

Jourová had previously tweeted optimistic comments about talks this week with U.S. officials on the framework. Yet, a Commerce Department press official on Friday morning said any statement about the outcome of talks was “kind of up in the air at the moment.” By Friday afternoon, an official said Commerce would not be commenting on the situation.

Věra Jourová, European Commissioner for Justice, Consumers and Gender Equality
Image: EC – Audiovisual Service/Mauro Bottaro

Even if the Privacy Shield survives the new U.S. presidency, it could be impacted by legal challenges in Europe.

Nearly 2,000 U.S. companies are participating in the Privacy Shield framework. The self-certification program counts several U.S. travel management companies and other industry providers as signatories. It lays out protocols related to transfers of personal data on European citizens to the United States. Without it, companies may need to comply with the regulations of each individual country from which they export data.

“If they were to repeal Privacy Shield, it puts more friction into doing deals,” said Oversight Systems CEO Patrick Taylor. “Laws of different countries force clients to behave in different ways. They have to comply with that and that then forces that on me.”

An expense fraud detection company, Oversight in December announced its certification under the framework. World Travel Inc. was the first travel management company to join, followed by others including FCM, Omega World Travel, Ovation Travel Group and Travel and Transport.

“We’ve always viewed Privacy Shield as a tool in the toolbox that we can use to facilitate cross-border data transfers,” according to World Travel Inc. EVP and corporate counsel Maribeth Minella. “If Privacy Shield does not work for a client — now or later — our alternative is always to put in place a secure data transfer that meets applicable laws, rules and/or regulations. There are many moving parts connected to cross-border transfers that range from different requirements from country to country, the upcoming General Data Protection Regulation, Brexit, etc. The key for any business is to stay informed and be able to put in practice, quickly, administrative and technical solutions that meet a client’s needs.”

Other companies including American Express Global Business Travel and BCD Travel have said all along they would use other means.

According to BCD Travel EVP for technology, products and innovation Russell Howell, the TMC’s U.S. operating company “decided last year to not certify under the Privacy Shield, the replacement to the U.S. Safe Harbor Framework that was declared invalid in October 2015. Instead, we are pursuing Binding Corporate Rules, Model Clauses and other more highly regarded mechanisms used to transfer personal data between the European Union, U.K. and the U.S. It appears we made the right decision given current concerns over whether … Privacy Shield will survive as a long-term solution in the European Union and the U.K.”

Model clauses are “doable but it’s just much more painful” than a broad program like Privacy Shield, according to Taylor.

“Information security has made business harder,” he said. “If we wonder why productivity numbers don’t go up more, I could argue all the time we spend on security is decreasing productivity. But you can’t not do it. The threats are very real. Our network is probed by potential hackers regularly.”

Of course, self-certification and the other commitments do not in themselves protect personal data. Taylor said Oversight doesn’t house personally identifiable information, but “we act like we do.”

The company employs data-protection best practices from storing only the data it needs to employing firewalls, encryption, intrusion detection systems, third-party tests and regular software updates. Only those who need to see data to do their jobs have access to it.

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‘Laptop Ban’ Prompts Review Of Travel, IT Policies

[UPDATE, April 19, 2017: Emirates cited revised U.S. government policies for its decision to reduce flight frequencies on five U.S. routes. In May the airline will begin reducing to five weekly from daily the flights to Fort Lauderdale and Orlando. In June, it will trim twice-daily Boston and Seattle services to one per day. The same reduction will impact Los Angeles services, effective in July. “The recent actions taken by the U.S. government relating to the issuance of entry visas, heightened security vetting and restrictions on electronic devices in aircraft cabins have had a direct impact on consumer interest and demand for air travel into the U.S.,” according to a memo to travel agencies. “Over the past three months, we have seen a significant deterioration in the booking profiles on all our U.S. routes, across all travel segments.”]

Checking laptops and tablets isn’t just an annoying hit to productivity. In many cases, corporate policies don’t allow it. How do organizations reconcile those policies with new aviation security rules that ban all but small electronic devices from airplane cabins on inbound flights from certain Middle Eastern and North African airports?

Half a dozen travel managers from multinational organizations told The Company Dime how they’re reacting to new U.S. and U.K. restrictions. One way around is obvious: Don’t book itineraries involving the affected airports. The U.S. electronics ban covers flights from Abu Dhabi, Amman, Cairo, Casablanca, Doha, Dubai, Istanbul, Jeddah, Kuwait City and Riyadh.

When it’s not possible to avoid those airports, companies may consider policy modifications or exceptions allowing travelers to check devices. That won’t sit well with those concerned about theft, data privacy and damage. Switching off devices and using encrypted hard drives may help.

To work out workarounds, some travel departments are coordinating with security, risk management, legal and IT. A first step is filling in impacted travelers on the particulars. Point-of-sale messaging can direct them to book a different itinerary when necessary or inform them of other steps. Travel confirmation emails and pre-trip reports can provide destination-specific info. Authorization tools and travel agency mid-office systems also play a role.

So do mobile apps provided by travel management companies and risk management firms. BCD Travel SVP Yannis Karmis said the TMC sent messages to impacted travelers via the TripSource mobile app “within minutes” of picking up information about the new restrictions.

Beyond communication, one approach is giving travelers “clean” laptops housing only the basics. Or, they’re instructed to back up data to the cloud or removable storage devices like thumb drives (not banned from cabins) before wiping their own laptops. In these ways, sensitive corporate data isn’t exposed in transit.

Image: Dubai International Airport

International SOS EVP Tim Daniel said some industry sectors are more prepared than others when it comes to traveling with proprietary corporate information. Where there are no protocols in place, “people are sort of scrambling now,” he said. “For travel managers, it has not been a well-addressed topic. This is a teachable moment and a chance for travel managers to talk with colleagues.”

According to a travel manager at a large tech company, “We do discourage checking laptops and are concerned about the security at baggage claim. We are looking into a loaner program and having everyone leverage cloud storage and email, which may be the wave of the future.”

Another travel manager said travelers are advised to check laptops after securing them with TSA-approved locks. “IT said that if this is long term we need a long-term strategy,” the travel manager relayed. “They may want loaner laptops in those regional offices.”

In a letter to members, Association of Corporate Travel Executives executive director Greeley Koch wrote that some companies expect to run computer exchange programs.

Issues related to IT policies are one thing; travel operations are another.

One travel manager asked, “Do we pay to book away from those carriers” affected by the new rules? To answer the question, the travel manager now is running models to determine average ticket price differentials.

This kind of thinking, by individual travelers and corporate managers, could have ramifications. Should the restrictions stick, “certain Middle Eastern hubs may become structurally disadvantaged over time,” according to a March 23 research note from J.P. Morgan analysts. At the same time, European hubs may “extract yield premiums in exchange for making better use of business travelers’ time.” They pointed to “the tech-heavy corridor between the United States and India” as an area where consequences could be “material.”

“We are watching for fare increases and inventory management challenges” at U.S. and European carriers, according to one multinational buyer.

BCD Travel’s Karmis said he doesn’t expect travelers “to engineer incremental connections to avoid the ban.” While travelers planning to connect through an impacted airport may decide to connect elsewhere, Karmis said BCD hasn’t yet seen big shifts.

Nor has American Express Global Business Travel, said Jeremy Quek, airline practice lead for the TMC’s consulting team.

But should traffic patterns change, travel managers will have to consider the repercussions for airline contracts. “If people change to alternate options, does the company have negotiated discounts on those routings?” Quek asked.

There’s no telling when — or if — the United States and the United Kingdom will lift the new rules. The U.S. Department of Homeland Security said current restrictions are in effect “indefinitely.”

According to International SOS, “this measure or something like it will be a feature of international air travel for quite some time.”

IJet International suggested “a moderate likelihood” that U.S. or U.K. officials modify the list of impacted airports “in the coming weeks.” There also is “a moderate-to-high likelihood” that other countries announce similar restrictions.

IJet added that restrictions likely won’t change until authorities deploy new ways to screen larger electronic devices at passenger checkpoints.

That’s what the International Air Transport Association wants, and soon.

IATA director general Alexandre de Juniac on Tuesday bashed the U.S. and U.K. restrictions. “Even in the short term it is difficult to understand their effectiveness,” he said in a speech to the Montreal Council on Foreign Relations. “And the commercial distortions they create are severe.”

Additional info: Travel managers discussing this topic mostly did so anonymously. They cited sensitivities around government policies and their organizations’ security procedures. Some admitted to cynicism. They wondered if the reasons for the restrictions are political. Among the carriers affected by the U.S. policy are Emirates, Etihad Airways and Qatar Airways. Those three have faced a public relations and lobbying battle waged by American, Delta and United. The U.S. carriers claim the Middle Eastern airlines enjoy unfair government subsidies.

The U.K.’s ban excludes Abu Dhabi (Etihad’s base), Doha (Qatar’s base) and Dubai (Emirates’). It includes Tunisia and Lebanon, which have direct service to the United Kingdom but not the United States.

Some affected airlines, including Emirates, are allowing travelers to gate-check electronic devices.

Here are fact sheets from DHS and the U.K. government.


Mitigating The Information Security Risks Of Travel With Mobile Devices

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Today In Chatbots: Concur’s Hipmunk Demos, HelloGbye Launches

Concur still isn’t saying much about its plans for Hipmunk, but a client conference this month featured a roadmap for its natural language processing capabilities. According to a March 15 tweet by Concur VP of business development R.J. Filipski, Hipmunk showed attendees it was enabling “chatbot-based business travel booking via Concur and your preferred TMC.”

Meanwhile, a new NLP-based app for small businesses called HelloGbye last week joined Apple’s store.

These apps and numerous startups are applying natural language, chatbots and artificial intelligence to business travel. NLP allows travelers to type or voice (using Siri and the like) requests for travel options into apps using everyday talk. Algorithms and data on the back end return personalized results and purchase capabilities.

According to a presentation document obtained by The Company Dime, Hipmunk co-founder Adam Goldstein showed clients one way Concur is using the travel planning company it acquired last year. The presentation started by describing the beginnings of Hello Hipmunk as “a simple email bot.” The idea was to “take the agony out of group travel planning by allowing customers to ‘cc’ a bot into their email conversation [and] allow the bot to respond back with hotel results,” according to the slide deck. The Wall Street Journal reported on March 14 that Concur has rolled out this feature.


Image: Thinkstock

The presentation indicated that the simple bot would grow in two directions — one as “core functionality” and another in channels like email, Slack, Facebook Messenger and Microsoft’s Skype. Goldstein also noted functionality for fare alerts and budget-based searching. A partnership with Facebook on payments apparently is in the works.

It’s not clear how experimental some of the demonstrated features are. Concur would only confirm that Hipmunk “is exploring ways to incorporate data from Concur Travel to offer more personalized and relevant experiences for business travelers.”

According to the presentation, the “Hello Hipmunk team has created extensive NLP and back-end bot ‘services’ to power future Concur bots.” These include “in-trip management capabilities” by Concur and TripIt — “becoming a true travel agent.” Allowing travelers to change, cancel and rebook “in the channel of their choice via bot” would deflect customer service calls, the presentation noted. The “long-term vision” for Hello Hipmunk includes end-to-end travel services — “on par” with the web — that manifest a conversational, personalized “front-end travel agent experience,” according to Goldstein’s slides.

Just how much new NLP services are aiming to go without human travel agents is one of the ways they’re differentiating from each another.

“I see an evolution from this phone where you have tons of apps on it to a future where, for example, my Facebook Messenger right now is a mix of people and companies and bots,” said Sabre Labs head Mark McSpadden. “Now some of those companies I’m talking to have people behind them so I’m actually chatting with a real person when I chat. Some have automated that chat process so that … I am interacting with a computer system. What gets interesting is [whether] things evolve so that you blur the line. Maybe I’m starting by talking to a company and it’s the bot that is helping me but seamlessly I can transition to an agent if the bot can’t help me.”

The founders at HelloGbye, who released their app on the Apple iTunes store last week, believe users should be able to do everything without human intervention.

“Where the intelligence lies is in taking that text and applying an algorithm to it that understands the context,” said HelloGbye head of marketing Greg Apple. “We have a rich conversational platform that’s fully digital. No humans. We have a semantic capability to understand what you’re asking for and a sentient capability that understands the context of your request.”

Apple acknowledged that other providers may be offering “a richer experience” because there are people behind the scenes who “are smarter than machines … but they can’t scale.”

HelloGbye partnered with American Express for its artificial intelligence component. Amex’s credit card data helps deliver to users ranked sets of hotel properties from which to book.

HelloGbye has subscription-based individual and small business programs that offer access to preferred hotel rates from Priceline. Users can earn cash back and make changes to airline reservations without incurring an extra fee (airline change fees still apply). Subscribers still pay a fee when they make changes by phone, handled by Ontario-based fulfillment partner Flight Network Inc. “We’re not saying ‘no’ to calling, but our goal is to automate whatever we can,” said Apple.

Asked if the technology could be made available to other travel agencies, Apple said the company is open to it and already heard from some.

Additional info: McSpadden and officials from American Express Global Business Travel, BCD Travel and others spoke last month on a Teleconference about the challenges of adjusting travel operations to incorporate bots.

Requests for information on where Evature fits into Concur’s natural language functionality went unreturned. Evature provided the technology for Concur’s mobile app voice-powered search as part of a 2012 partnership.


Six Reasons Concur Wants Hipmunk

Latest Startups Try Texting, With Agent Or Bot

‘OK Google, When’s The Next In-Policy Flight To Chicago?’

FCM Travel Solutions Takes Mobile TMC Service To A New Level With Messaging

Pana Downplays Commissions In Unmanaged Business Travel Service

Teleconference 7: Mobile Technology

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No Show? No Commission

Industry practice stipulates that hotels don’t pay commissions on penalty charges when travelers don’t show up, even if the rate they booked was commissionable. Yet, one expert said some travel management companies get hotels to stray from the standard practice. No-shows are fairly rare, but the topic could become more relevant if hotels continue to tinker with cancellation policies.

When no-shows occur, or if travelers try to cancel after the cut-off time, hotels typically impose a fee equal to the first night’s room rate. Hotels account for this revenue differently than they do for consumed room revenue.

“The commission payment tools, and indeed the philosophy in the industry, do not support paying commissions on non-room revenue any more than paying it on food and beverage charged to a guest folio which also ends up outside of room revenue,” explained one hotel industry insider. “I’m not saying it is right, but that is the logic behind it.”

no-show commission

Image: Thinkstock

Similarly, hotels typically don’t count paid no-show fees toward a corporate account’s volume goals.

Clients of hotel commission specialist Onyx CenterSource include travel management companies, hotels and corporate buyers. Commissions on cancellations and no-shows “is a topic we are involved in with our customers on a regular basis,” said chief sales officer Trond Sorensen.

Though hotels as a rule won’t pay commissions in those cases, Sorensen said some TMCs try to get exceptions written into their agreements. “It’s not frequent but it does happen,” he said. When it does, “the hotel is obliged” to pay commissions.

Hotels refusing to pay commissions on no-shows “is a big pet peeve,” said Jack Reynaert, manager of global travel and meetings for Meritor. He said requests to hotels for those commissions “always fall on deaf ears.” However, Reynaert, who runs a program using the ARC Corporate Travel Department designation, said he sometimes can convince hotels to count no-show fees toward his overall volume goals. “I show them how much we spent with them,” he said. “Even though we didn’t occupy the room, they still got revenue.”

Again, these are exceptions.

Hickory Global Partners president Chris Dane hasn’t seen agencies contractually secure commissions on no-shows. “You may be able to negotiate the commission on an individual no-show at an individual property,” he said, “but I never heard of if being done as a policy for any particular agency.”

Paul Hoffmann, CEO of eCommissionSolutions, said his firm can present to agency clients the opportunity related to hotel no-show commissions. “I can’t confirm or validate their success or rejection of their results,” he said, “but it is a topic that is being addressed often.”

For many, the challenge involved in uncovering the associated commission dollars and convincing hotels to pay isn’t worth the trouble. No-show rates in corporate travel are pretty small. Sources suggested they account for anywhere from a few percentage points of a company’s total hotel bookings to under 1 percent. Special corporate rates negotiated for individual accounts usually are not commissionable anyway.

For big travel management companies and corporate buyers who get commissions passed through, though, the dollars can add up. Business travelers book plenty of commissionable stays. TMCs bank on it.

The Corporate Solutions Group provides hotel commission collection services. Partner Bob Langsfeld said corporate clients who more aggressively try to recover commissions sometimes will look at no-shows and cancellations. He said the data trail on those can be hard to follow, further complicating the already challenging task of commission collection.

“There are ways to try to recover depending on the level of activity,” Langsfeld said. “You need your ducks in a row and knowledge about the property, the chain and the TMC.”

Upwards of 50 percent of client contracts with TMCs, he said, stipulate that commissions collected by the TMC will be returned to the client. But clients shouldn’t always expect to see it all. There can be a lack of transparency. For the TMCs, hotel commissions can be “a big deal,” Langsfeld said. “It is one of their last vestiges” of revenue from suppliers.


Hotels Consider More Cancellation Policy Tweaks

Sources: Hilton Stops Dickering Around With Reduced Commissions

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ARC Data Showing Promise For Buyers

Prism data is the basis for corporate deals with the big U.S. network airlines. It will be for the foreseeable future. But it has limitations. The Airlines Reporting Corp. designed new tools for corporate buyers and agencies that better detail activity and marketplace benchmarks. This can prepare them for contracting. In an early use case of ARC Corporate BI, a company used the tool to tweak some policies, reinforce others and secure more favorable contract terms.

“The data sources that most companies negotiate on — TMC data and Prism — are decent sources,” said KesselRun Corporate Travel Solutions vice president Krissy Herman. “But so often there is more information that can help strengthen an organization’s position in negotiations with an airline, or shed light on certain behaviors that occur within an organization that they should take action on to help better support airline partners.”

The consultants at KesselRun in 2016 applied ARC data for an undisclosed multinational client to optimize its air program and rework contracts with two airlines. Benchmarking was a first step.

Made available last year, Corporate BI taps into ARC’s immense data repository to provide transaction-level detail. It includes a company’s volume, cabin mix and average price paid — by airline and by origin and destination. Users can compare themselves to the entire corporate market and to peer organizations spending about the same. Benchmarking by industry sector is in the works. ARC bases corporate-travel datasets on dedicated ARC numbers associated with corporate TMCs and individual companies.

Prism data shows average ticket price by market. While travel management companies can break it down by classes of service, sometimes they need “a little more heavy lifting” to pull, verify and use granular data, Herman said. Especially if the client has some atypical citypairs, the TMC data sample may be too small to offer much insight.

KesselRun’s exercise showed the client had performed well overall but had room for improvement. “It’s one thing to say to a client, ‘Book in advance and save money,’ ” Herman said. “It’s another for a client to pass actual data up the food chain. ‘Here’s proof that based on our patterns we can save x amount by tweaking policy and behavior.’ ”

ARC data

Beyond corporate travel, comparisons against the entire spot market could show if contracted rates are worth it on specific routes. Spot market data represents everything in indirect channels not booked through the client’s designated TMC.

Herman explained that the client’s previous contract included a flat fare for business class on a transatlantic route that “more often than not” was higher than what was available in the spot market.

Those sorts of observations can prepare the buyer for airline negotiations. “If you are not making share on a certain term,” Herman said, “maybe the airline wasn’t giving you the best fare in that market. Now we can make that argument.”

KesselRun partner Brandon Strauss added that ARC’s ability to break down average ticket price by route and by carrier makes it “a real leverage tool.”

ARC managing director of product management Arun Gupta said ARC BI tools define O&Ds exactly how airlines do. Cabin-class mapping matches up. Reports are available weekly, which he said is more frequent than what TMCs and airlines typically provide. All of that can help overcome some of the complexity in how often airlines tweak pricing, fare classes, fare basis codes and the like.

“Corporates are disadvantaged,” said tClara managing director Scott Gillespie during a panel discussion at an ARC event in October. “You hear constantly from travel buyers that Prism datasets don’t really match their own TMC data. So where is the gap? Who is right? Who has a vested interest? It’s never terribly clear. In that sense, the corporates are behind. That gap will close, as it should.”

BCD Travel senior director of supplier relations Jeffrey Blaszyk also spoke at the ARC event. “A lot of times, it’s our data versus theirs,” he said. “But when we can bring in third-party data that maybe correlates to what we are showing, it helps us when we go back to [the airline] if we are seeing some discrepancy.” He said it “shows we’re doing our homework.”

United Airlines director of sales products and programs Joe Tibble added that better data in the buyers’ hands has meant more meaningful conversations. “Traditionally we would go in and say, ‘Here are your four or five opportunity areas,’ ” he said. “Jeff already knows those opportunity areas, so the conversation has shifted.”

For KesselRun’s client, the analysis showed “significant differences in average ticket price between airlines” in several key markets. That led to increased discounts.

In the Charlotte-Shanghai market, for example, the client expected its volume to grow in the coming 12 to 18 months. Using the ARC data, KesselRun found that the company’s business class ATP on that citypair was $1,100 higher than the corporate market average. Though the client allowed first class on those flights, and its first class ATP beat the market average, the numbers showed “a compelling business case” to move all travelers to business class. Doing so, according to KesselRun, would generate as much as $9,000 in savings just on that one route.

The analysis also spotlighted which carriers offered the best fares within each class of service. That aided negotiations by uncovering where airlines should improve discount levels to remain competitive. It also showed the client how shifting share can help meet contract goals.

Meanwhile, benchmarking the client against the spot market identified where travelers may have indicated they “found this fare cheaper online.” As a result, the client worked with its TMC “to ensure agents are checking all available avenues for best faring,” according to KesselRun.

One Piece Of The Puzzle

The ARC Corporate BI product isn’t an airline corporate sourcing tool that allows for forecasting, what-if scenarios and comparisons of airline contract offers. It currently doesn’t include quality of service index (QSI) measurements. Airlines use QSI (sometimes called fair market share, or FMS) to state what they believe their fair share is in a given market based on various weighted factors. They reward clients who deliver above and beyond. QSI formulae vary by carrier. Some big TMCs and industry consultants have their own.

VP of product Doug Mangold said ARC is exploring how to facilitate more sourcing functions within Corporate BI. It’s working with an unnamed partner to bring in QSI.

Advito vice president Bob Brindley said that while more information can only benefit buyers, ARC data is just one piece of the puzzle. He said there’s an opportunity in the market to go further by incorporating data generated after ticketing: on-time performance data, ancillary spending and so forth.

GoldSpring Consulting partner Neil Hammond said ARC datasets can be valuable as clients search for good benchmarking info. As an independent data source, he said, the ARC tool can assist in clearing up discrepancies in Prism data. Prism data feeds show an airline what it’s getting from a company and, lumped together, what that company gives everyone else. “It tends to be high level with not a lot of detail,” Hammond said. “It can be frustrating.”

Besides contract modeling, Hammond would like to see ARC Corporate BI include data from non-U.S. points of sale. With the International Air Transport Association, ARC compiles Bank Settlement Plan data from around the globe. That’s part of the separate Direct Data Solutions product.

Within the United Sates, direct bookings on sites are missing from ARC Corporate BI data. A lot of Southwest Airlines’ corporate travel sales, for example, go direct. The same is true for Prism (owned by Sabre), though United and Concur recently worked out how to bring in TripLink data.

Additional info: ARC Corporate BI is a subscription-based product. Pricing, which ARC did not lay out, is determined by client volume. 

ARC also offers Faresight, which provides a far less detailed view at a lower price point. ARC now is working to develop one-page airline performance reports. They will show corporate-specific market shares, average ticket prices and QSI. Snapshot reports on specific city pairs didn’t get much traction, Mangold said.

Gillespie’s tClara firm gets ARC data for its Air Clarity reports. Analytics firm Prime Numbers Technology, part of Atlas Travel & Technology Group, recently announced a licensing deal to use tClara’s fair market share data with sourcing clients. According to Prime Numbers, tClara calculates FMS “using global flight schedules, rigorous connection logic and user-defined parameters.”


ARC Aims To Clear The Air On Benchmarking

Sourcing Tools Help Big Buyers Tackle Air Market’s Twists And Turns

New Reporting Takes TripLink A Step Forward

How Non-BSP Airlines Create Inefficiency For Travel Management

New American Airlines Discount Structure Puts More Business Under Contract

AA Changes Basis For International Discounts

GBTA Airline Request For Proposals Template Aims For Better Total Value Comparisons

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Amadeus To Retire ‘Workhorse’ Mainframes

Amadeus expects this year to reach a major milestone, decommissioning the last of its mainframes. This is the culmination of a multi-year process to achieve “more flexibility and resiliency.”

Sabre isn’t there yet. Under new CEO Sean Menke, the company has embarked on a general tech upgrade program. “We will make investments in our IT infrastructure this year to modernize, drive efficiency in development and ongoing technology costs, further enhance the stability and security of our network and accelerate our shift to open source and cloud-based solutions,” said CFO Rick Simonson in February.

Improving speed-to-market, flexibility and cost efficiency are key goals, according to Sabre.

Amadeus and Sabre together provide reservations technology to airlines flying more than half of all passengers boarded globally, according to Travel Technology Research. They are the two largest players, with China’s TravelSky a distant third and the rest of the market highly fragmented. Amadeus and Sabre also lead the markets for airline departure control and inventory management systems, according to T2RL.

With many media outlets blaming system problems on antiquated technology, readers may hope that these upgrades will tackle the gremlins behind recent airline IT outages. Unfortunately, the premise is oversimplified. Say an airline’s systems go down and flights stop. It blows up on social media. Maybe the company declines to tell reporters exactly what happened. Journalists then quote industry observers who guess at the cause. Often not airline IT experts, these observers cannot resist assuming that old technology is involved, and that old tech is bad tech.

An article last week in The Wall Street Journal attributed problems to complexity and implicated “aging” reservations systems. But those systems did not cause the referenced outages, according to the article itself. The problem-causing systems cited by the Journal were a computer router, a power system, a piece of texting software and the Internet.

Image: IBM

When the media mention “antiquated technology,” they typically are referring to mainframes running the Transaction Processing Facility (TPF) operating system. When IBM invented these in the 1960s, some of the hardware looked like oversized reel-to-reel audio recorders. These systems and their successors are known for being secure, reliable and crazy fast. The hardware has evolved. The latest mainframes look more like Batman’s refrigerator, as one Bloomberg editor joked.

Originally created by IBM and Sabre, TPF software that runs on these mainframes is still a top choice for computing environments asked to handle the highest volumes of transactions by the largest number of users. Almost all of the biggest banks, insurers, retailers and airlines still use it, according to IBM. Global distribution systems were built on it.

Nowadays, IBM’s z/TPF mainframes also can run more modern software. Airline IT companies for years have been moving functions in steps either to that new software within the mainframes or to new hardware as well.

“There’s nothing wrong with TPF,” said one former Amadeus executive who preferred to be unnamed since he’s no longer with the company. “It’s a workhorse. Everyone knows it’s limited but I don’t blame TPF for outages. It’s stable.”

The Amadeus migration is more about commercial endeavors than IT reliability, he said. “It’s like a religious debate. There are reasons for and against.”

TPF has its flaws. Finding programmers can be a challenge. It’s rigid. Of late, the limitations have made it difficult to keep pace with airlines’ retailing ambitions. These downsides change the equation.

Sabre does not run everything on mainframes. Some components don’t need their processing power. The company has moved shopping, inventory, customer profiles, availability, ancillaries and other applications to open-systems environments.

It was a failure in the pricing system that hurt a handful of Sabre’s airline clients last fall, Sabre executives said last month. The company will spend $20 million this year to move that pricing system from a Hewlett Packard Enterprise-managed facility to an internal one, they revealed. Mainframes were not to blame there; nevertheless, Sabre is planning for life without them.

“We will continue to replace mainframe services with open systems services where it drives innovation and value for our customers,” Sabre senior vice president for delivery solutions Dolly Wagner-Wilkins said Tuesday. “The discussion at Sabre is not if but how. Over time, as the marketplace evolves, we expect the mainframe to be completely replaced with new services.”

Amadeus “has almost completed its move,” according to a February statement attributed to Amadeus IT Group VP for reservation, distribution and mid- and back-office Denis Lacroix. “The rationale here is that these mainframes are very heavy and centralized, and today’s world is no longer centralized.

“A number of years ago, Amadeus decided to decommission its mainframes and move all its core applications to a large network of Linux computers,” Lacroix explained. “Beyond Linux, we have a number of open source initiatives ongoing, and have built our own cloud platform called Amadeus Cloud Services. The open source model has had a massive impact on how the company works, giving us a host of benefits — from the collaborative work sharing ideas and experiences with other open-source companies, to being able to hire the right talent that can help us to stay ahead of competition.”

Additional info: For Sabre, the overall modernization effort is a driver behind recent layoffs, according to Simonson’s fourth-quarter presentation to investors.

No longer a provider of res systems per se, Travelport years ago moved certain services to open systems, including fares and shopping. Most of the new capabilities the company has built use open systems, but the mainframe remains “the system of record,” according to CEO Gordon Wilson. He said Travelport has not found anything better than z/TPF to do the “back-end system work” for its GDSs. “There are very few players who were TPF-based that are not still using the system of record, albeit having moved the more dynamic stuff into open systems,” Wilson said during a February interview.

Wilson also said Travelport is adding services to provide disaster recovery for Delta’s systems. “In the event of a systems issue or a fire, they have asked us to provide those services,” he said. “They are moving from another provider. We’re building another data center which is an investment we are making. We are going live with that in the summertime.”


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Airlines Diverging On Custom Corporate Bundles

Delta Air Lines in 2015 started offering tailored packages of products and services to corporate accounts. It’s not doing that anymore. It has other ways to enrich commercial relationships with add-ons. The change in strategy reflects two different ways airlines view the concept of corporate bundles.

Travel managers for a while talked up the idea of fares specific to their companies that include extras useful for their travelers. It would help them show value and avoid ancillary spend-tracking headaches. When booking trips or submitting expenses, travelers would be clear on which supplemental services were in bounds.

Travelport has been providing related functionality through its merchandising suite of services. CEO Gordon Wilson during a Feb. 21 interview said the company has seen “progressive uptake in line with two things happening.” One is travel management companies adopting the latest agent desktops, like Travelport’s Smartpoint. The other, he said, is corporate booking tools coding to APIs.

Travelport global product and marketing head Ian Heywood said the company has been testing the provision of bundles through some of those booking tools. Agents using desktop systems other than Smartpoint can access the distinct corporate offers through Travelport’s Universal API, he said.

“One of the biggest problems is, the airline and the corporate can do a deal but is the agent aware of it?” Heywood asked. He pointed out that airlines can craft special products and pricing for agencies, too. For example, Travelport materials indicated that Air India presented to U.K. travel agents the opportunity to add limo service to business-class bookings.

Amadeus since early 2015 has offered airlines a tool to personalize the corporate travel experience. Using Altéa Corporate Recognition, an airline can specify which airport and inflight benefits should be provided to a given account’s travelers. A spokesperson noted that the tool now is integrated with Amadeus systems for corporate agents and the Cytric self-booking tool. Lufthansa was an early adopter. Amadeus said “several” other European carriers use it while airlines in other regions will implement this year.

corporate bundles

Image: Thinkstock

Lufthansa also is working to provide customized corporate offers via direct connections.

Finnair “recently” took a first step toward corporate bundles, according to an official. It was for the carrier’s “economy comfort” product, normally sold as an ancillary. The official said corporate interest in economy comfort has been stunted by policies that disallow separate ancillary purchases and by the “complicated TMC buying process.” Now, though, Amadeus agents can book it for clients more easily than they could before. The airline is working on bringing the functionality to Sabre and Travelport agents.

A next step is wrapping Wi-Fi into corporate fares for long-haul flights. “Later in 2017,” according to the Finnair official, “we will be able to tailor bundles that match each corporate’s needs.”

Farelogix CEO Jim Davidson is a fan of the bundle concept. He envisions personalization based on many dynamic variables. For example, a traveler going to London for a meeting on a Tuesday would be entitled to a certain set of services, based on airline inventory. Those services could be packaged in for free as part of the corporate fare, or at an extra but discounted cost based on negotiations.

That vision is part of the promise of IATA’s New Distribution Capability.

The Farelogix Sprk agent tool has an NDC API underneath it. Some corporate buyers “love it” when they see how the system brings in content, Davidson said. “But corporate booking tools say, ‘Great, but I take everything from GDSs.’ ” Providers of those tools, owned by GDS companies in a few notable cases, “don’t seem to be willing to make connections outside of the GDSs to get this content,” he added. (Some online booking tools have had trouble accessing standard bundles, even when made available in the traditional GDS channel). Farelogix is getting the content via direct connections to Lufthansa and others.

Other developments apparently have lessened the desire for specialized corporate packages. At least in the United States, the big airlines have been adding standard benefits to commercial deals without negotiating them individually. Delta through its Edge program, for example, provides priority boarding and standby, more favorable upgrade positioning and other advantages.

“Travelport gave us a framework for supporting branded fares which could be part of a corporate contract,” a Delta official explained. “Now, though, Delta offers branded fares and access to Delta Comfort Plus and first class directly through our TMC partners.”

The official confirmed that Delta no longer is crafting custom deals like it did in 2015 for client Micron Technology, which included lounge access and paid seats.

American Airlines and United Airlines also aren’t currently customizing baskets of products and services for specific customers. “We don’t have information to share on corporate bundles at this time,” according to an AA spokesperson. At United, “what is available now is available to all via,” an official wrote.

The Big Three also have been developing online portals for corporations and TMCs to manage soft-dollar points. Through them, accounts can allocate points for a particular perk for a particular traveler. Some small business programs offer the same for non-contracted accounts.

At JetBlue, the corporate sales team hasn’t seen many requests for custom offers, according to a statement from corporate sales director Robbie Mehoke. “The top needs, like free Wi-Fi,” Mehoke indicated, “are already included in the fares without additional charge.”

Then, of course, there are elite status tiers within frequent flyer programs. Those give a free checked bag and other perks to travelers. Very frequent travelers earn such status themselves. Companies including Relx Group also work with airlines to grant elite status to senior employees.

“We are simply asking our travelers to buy lowest logical fares at the time of purchase,” said Relx global travel director Jim Sisco. “The things they would get in a bundle they are getting anyway, mostly based on elite frequent flyer status.”

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Taxing Calls For Tracking

Tax jurisdictions around the nation and globe increasingly are going after companies for revenues owed based on business activities within their borders facilitated by travel. Ernst & Young last year pointed out “a significant increase … in both business travel and nonresident income tax enforcement” by the state of New York. That’s not the only state that stands to gain by increasing audits.

What does this have to do with corporate travel? Travel departments often get roped in when there’s an audit or when a company has decided to get its act together in case of one.

“Inevitably, corporate travel gets stuck with this because if anyone knows how to get to the data, they do,” said Monaeo co-founder Nishant Mittal. A winner of this year’s Concur app center “partner of the year” award, Monaeo offers automation to track travel activity under the lens of possible tax liability. Mittal and his partner created the company six years ago after getting caught up in the tax issue as travelers.

Monaeo co-founder Nishant Mittal

The biggest challenge to better preparation is that no one owns the whole process, Mittal said. The head of tax typically handles enterprise tax issues. These include the management of permanent establishment and BEPS. Employee tax issues often fall within mobility, human resources or payroll. These include expatriate taxability, stock compensation allocation and payroll withholding. The former bucket of issues likely does not require employee engagement, while the latter may.

With a background in global mobility tax, Vic Arora co-founded Blackspark Corp. in 2011. He said he’s never seen a corporate travel department responsible for overseeing the issue. “They’re involved in the implementation side of things,” he said. “Generally we start working with leadership in tax and HR and payroll on the more advanced inquiries, where the company has a mandate in place and a budget.”

Arora said on rare occasions companies will tackle the issue using a pre-travel authorization process, in which case corporate travel is involved. Even if companies do not go that far, he noted, “you certainly need a consolidated process where even data you don’t have can be collected. An open travel policy is not a defense with tax collectors.”

The process requires tracking and examination of travel and expense records for visibility into where employees have been and why. For tax purposes, Arora said, travel itineraries rank as the highest-priority data source followed by private charter information, card swipe data and expense details.

“These are also the sources that tax departments ask for during an audit,” Mittal said. “Ten years ago, it was not worth New York state’s time to go through a room full of paper receipts and itineraries and figure out how much to collect. The ROI on that effort was very low. Now, it’s ‘give me a thumb drive of your travel and expense data’ and they have technology to process that data. Governments are investing in this. It’s only going to grow.”

Accounting firms of course help clients with these issues, but Blackspark and Monaeo specialize in automating a largely manual process. They pull in the data and run it against databases of tax codes and jurisdictions. They can then warn companies about potential liabilities, or at least make sure they’re accounted for at tax time.

Blackspark has not received a request for a mobile app, though Arora said it would build one if asked.

Monaeo provides an app to individuals and enterprises that uses GPS to track movements. Mittal said this offers more accurate information than expense and travel data, but also has drawbacks. Notably, some users are not comfortable being tracked. Risk management providers face similar issues. Another option for Monaeo clients is to load software on company laptops, he said. Employees still would opt in to use it.

Most organizations are checking expense records and time sheets, rather than putting the app on employee phones, said Mittal.

Both providers consult with clients before establishing pricing on subscription-based models.

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Next Time, Avoid The Snow Disruption

[UPDATE, April 19, 2017: Rebooking service Freebird announced reseller deals with Altour, Options Travel, Safe Harbors Business Travel, Short’s Travel Management, Travel and Transport and Upside Travel. It also picked up additional funding from venture capital firms General Catalyst and Accomplice, and named industry vet Ellen Keszler as another advisor and investor.]

Did today’s blizzard in the Northeast wreck your travel plans? There are a number of developing services that can help corporate travelers avoid such problems.

A first step may be knowing the likelihood that a flight could be disrupted before booking it. Flightsayer, a service from Resilient Ops, presents a score for each flight where 1 represents the smallest chance of a disruption and 10 represent the highest. Scores are based on predictive analytics made possible by algorithms and machine learning using a variety of public and proprietary data sources.

There’s a consumer-facing website. Mobile apps are coming. Flightsayer now aims to penetrate corporate travel.

“It’s really about taking our API and plugging it into third-party technology that TMCs bring to their customers,” said travel business vet Michael Jacques, who in January became the company’s chief commercial officer. He said there has been some interest from a couple large TMCs. In addition to giving clients better information, maybe they’d use the predictive capabilities to know when to staff up.

Jacques also said a few corporate customers are using the service. “Some travel managers will only want to book flights that show up as Flightsayer 1 or 2,” Jacques said. “That could help optimize corporate contracts by taking out the ones that make less sense.”

Jacques said one GDS is testing Flightsayer’s API. He also indicated possible use by airlines themselves, which could make their operations more efficient.

The service for now is focused on the United States and Canada. Jacques said expansion to Europe would occur in the next three to six months, followed by the rest of the world.

Once you booked and are prepping for the trip, maybe bad weather strikes. Or an airline IT or mechanical issue sidelines your plane. Or some other unforeseen event occurs. Now what?


Image: Reuters/Kamil Krzaczynski

Using predictive analytics, Flightsayer also informs users about these issues and presents alternatives.

That’s the primary mission of another relatively new player. For a fee, Freebird gives domestic U.S. travelers protection. It automatically presents to travelers via mobile devices the opportunity to instantly book a new flight once their original is officially cancelled or delayed at least four hours, or if they miss a connection.

Co-founder and CEO Ethan Bernstein during a November interview claimed Freebird can “detect the likelihood of disruption hours and sometimes days before others.”

The company has a direct-to-consumer product but lately it has been focused on TMC reseller arrangements. Flight Centre’s corporate travel division and Casto Travel already have signed up. Bernstein said others are in the pipeline.

Freebird said clients of TMCs can apply the service for specific employee groups (maybe VIPs), for certain types of trips (customer-facing meetings, speaking gigs, etc.) and for specific sets of routes.

Integration is accomplished via APIs. In that way, travelers get messages through whichever platform their TMC uses.

Once travelers accept the alternative flight presented, Freebird does the booking. It integrates with GDSs. All passenger info from the original booking is used for the replacement booking. Freebird uses the TMC’s pseudo city code so the TMC gets credit. The new passenger name record goes directly into the TMC’s systems. Freebird sends a message to the agency’s mid-office informing them of the new PNR. TMCs still handle customer support.

Clients and TMCs can configure Freebird so alternative flights abide by corporate policies. Freebird, though, encourages corporate and TMC users to “open up their policy and not restrict availability in those moments of disruption,” Bernstein said. “Let travelers pick what is best for them.”

The service is priced by flight ($19 one way/$34 roundtrip during an introductory period) or as a subscription. Bernstein said the latter is more suited for corporate travel, with client costs calculated based on a year’s worth of travel data.

He described a “risk model” that the company has been working on. The goal is to understand how likely delays and cancellations are for specific flights and price the product accordingly. For example, Los Angeles-Phoenix in the summer is a much different risk profile than Chicago-Boston in the winter.

A future product expansion would see Freebird using the risk model to inform agencies and travelers about expected delays before they occur. That would allow for more proactive itinerary adjustments.

Marc Casto of Casto Travel today indicated that Freebird is soft-launching for some clients this week.

Travel and Transport also is working on making more informed booking choices. A planned enhancement later this year would enable its point-of-sale information system to estimate the risk of a missed connection. “It would give the agent insight and highlight if there is a back-up,” said vice president of customer solutions Joel Bailey. The first flight choice “may still be the best option for the traveler, but this will allow the agent to consult with them.”

Disruption management is crucial for TMCs. Some have been improving their services in this area. Travel Leaders Corporate, for example, now offers a monitoring and rebooking service via mobile devices. Called Travel Leaders Connect, it informs travelers when flights are disrupted and puts them in touch with a live agent for rebooking.

Airlines, too, have been refining disruption services. Delta, which claimed a first in 2011 when its mobile app began facilitating cancelled or delayed flight rebooking, is working with Travelport on another app, according to Travelport CEO Gordon Wilson.

Wilson played out a scenario during a Feb. 21 interview: “There’s a weather front coming and you are not going to go tonight. You need to have a hotel. We are live-testing an app with Delta at the moment which enables their passengers — according to tier, status or whatever — to get accommodated in real time at a hotel. They don’t have to stand in line.”

Delta officials declined to provide details.

In another recent development, United today announced a new online portal that empowers corporate and TMC clients to, among other things, easily access info on weather waivers.

Additional info: Resilient Ops is about two years old. It received funding from NASA to help build an air traffic control system that addresses both manned and unmanned aircraft. Freebird received funding from General Catalyst, Accomplice and Slow Ventures. Bernstein also mentioned a few angel advisors, including Carlson Wagonlit Travel CEO Kurt Ekert, TripIt co-founder Scott Hintz and travel industry vet Mitch Gross.


Coming From A TMC Near You: Proactive Trip Disruption Services

Airlines Ease Disruptions With New Systems, TMC Processes

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Business Travel’s Personal Toll: Identity Threat Or Reality Check?

Those who travel for business view warnings about the mental and physical hazards either as an “identity threat” or a “more concerning reality check.” This was a finding from an academic study published last week on the reaction to an earlier study exploring the “darker side of hypermobility.”

The first study argued that the perceived glamour of frequent travel overshadows the actual physiological, psychological and social repercussions. It was published in 2015 by Scott A. Cohen from the University of Surrey and Stefan Gössling from Sweden’s Linnaeus University.

Many media outlets reported on it. We alluded to it as part of an exploration into so-called traveler friction.

Due to the large number of user-generated comments from the public about the findings, the researchers took the next step. University of Surrey’s Paul Hanna joined them in authoring “The dark side of business travel: A media comments analysis.”

The trio analyzed 433 comments on 20 news articles about the original study. They found a roughly equal split of positive and negative viewpoints about frequent business travel. They also discerned two “key identities” characterizing the responses.

They called the first group the “flourishing hypermobile.” These commenters saw business travel as “integral” to their identity and their happiness. For them, there may be a bit of “romanticism” in being a world traveler.

They deny business travel’s health implications. Or, they at least do things to overcome them — like diligently exercising and eating well. They don’t dwell on the snafus but rather take “pleasure in overcoming adversity.” They also may show a tendency to try to “outsmart” their employer. “Instead of complaining about having to travel,” wrote one commenter, “embrace the opportunity you have been given to explore different places on your company’s dime!”

personal toll

Image: Reuters/Carlo Allegri

The researchers described this identity type as demonstrating “how control and agency have enabled strategies (pacing oneself, avoiding extra segments, selecting particular flight times)” to minimize business travel stressors.

Flourishing hypermobile commentary also “is littered with tropes of social status symbols.” These related primarily to frequent flyer program tiers and premium classes of service. “All function as an active challenge to the presentation of the negative impacts of frequent business travel,” according to the study, “and help to mobilize and maintain the position of the flourishing hypermobile.” The same is true of free travel earned through loyalty programs.

There also are skeptics in this group. One commenter called the original study “more bovine droppings from ‘academics’ attempting to justify their existence and their large budgets of ‘funding,’ i.e., taxpayers money being squandered on rubbish research.” Another wrote that business travel isn’t the biggest psychological risk; rather, it’s “doom and gloom claims” from researchers with “far too much time on their hands.”

The study’s authors suggested these cynics may be in self-defense mode. It happens “when an individual is faced with the disjuncture between their identity as an individual that participates in a particular activity, and the presentation of evidence that suggests that identity is undesirable.”

They also wrote that those in earlier stages of their careers are “far less likely” to denounce their lifestyle, which would lead to cognitive dissonance.

On the other end, veteran travelers are more likely to criticize frequent travel, perhaps “even regretting their earlier lifestyles.”

The more seasoned are more likely to associate with the study’s second identity type, the “floundering hypermobile.”

These commenters “seek solace” in public discourse highlighting business travel’s risks. They recognize how, for them, it “engenders a fragmented and problematic identity.” Those in this camp want to travel less but emphasize that they can’t.

Some of their remarks convey disempowerment, disorientation, loneliness and distress. “Just the thought of getting on a plane filled me with dread and anxiety,” wrote one. According to another, business travel is “cramped and tiring, [with] crap food and a punishing work schedule in a different time zone.”

There were mentions of coping mechanisms, like drinking alcohol. Sacrificing a home life was a major theme. “Family life?” asked one commenter. “What family? They don’t consider me as one of them!”

Some of those in the floundering group took issue with the notion that business travel is glamorous. In their comments, nostalgia for the idealized view is “presented as an irrational way of thinking,” according to researchers.

“I still know a lot of people who take perverse pride in being stuck on airplanes for a significant proportion of their lives, just as coal miners used to feel macho about going down the pit to get pneumoconiosis,” according to one comment. “Self-deception may be vital when you have no control over your travel plans but for the rest of us avoidance is the nicest strategy of all.”

According to another, “Everyone, including my x-wife (sic) thought I was having ‘the time of my life,’ always in first class, always upgraded, always expensive steak houses, cool cities, top-tier hotels … etc. Reality is it sucked.”

A recent LinkedIn discussion accentuates why people view business travel as either a benefit or burden. It was about a survey finding that 30 percent of respondents would take a pay cut for the opportunity to travel more. The original post drew hundreds of comments. Several were dumbfounded by the data. Some questioned the reliability of the survey’s source. Many guessed that respondents answering that way must have been younger workers who probably have no spouse or children. Clearly the stage of life that people are in highly influences their perspective.


The Cohen, Hanna and Gössling study points to an “emerging research problem” regarding whether and how concerns about well-being affect changes in travel.

The authors painted a rather defeatist picture. Their research indicated that “such changes are unlikely: flourishing hypermobiles are unlikely to change behavior, while floundering hypermobiles viewed reductions in business travel as beyond their perceived locus of control.” They added that it would be hard to change the public perception that business travel is an occupational perk.

As a result, they argued that a “repositioning” of how business travel is perceived must stem from “structural transitions” within organizations.

Getting there may require a few things. For example, “new lines” of study should tie together human resources management, travel management, safety regulations and a deeper understanding of the health consequences of frequent travel.

More tangibly, the study suggested organizations adopt more employer-friendly policies: encouraging remote conferencing when in-person interaction is not crucial; limiting employees’ nights away from home and how often they travel long distances; allowing premium class on those long trips; requiring rest between them; bundling multiple trips into single itineraries when geography permits; and disfavoring connecting flights.

Additional info: The authors noted that public discourse on business travel is “overwhelmingly” positive. Though some studies have addressed the negative effects, they are “far less prominent.”

Though the original study discussed frequent leisure and business travel, the follow-up focused on comments in “direct response to media reporting on the business travel aspects” of the study.

The authors pointed out that the 433 comments reviewed are “not representative of the wider population.” They came only from individuals who (presumably) read one of the articles and were willing to publicly post a comment. These individuals “almost exclusively” were current or former frequent business travelers, leaving out the perspectives of frequent travelers’ family members. Demographics of those submitting comments were not available. Skews based on gender or geography, for example, “are not objectively identifiable.”

The researchers analyzed comments on articles published about the first study in these media outlets: Daily Mail, Der Standard, Fast Company, FAZ, Financial Times, Frugal Travel Guy, Huffington Post, Lawyers Weekly, Mashable, ND TV, News Medical,, One Mile At A Time, Science 2.0, Smart Company, Smarter Travel, The Advertiser, The Economist, The Telegraph and Zeit Online.

Here’s the second study’s formal citation: Cohen, S.A., et al. The dark side of business travel: A media comments analysis. Transport. Res. Part D (2017)

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Concur Partnership Over, Egencia Announces New Expense Management Solutions

The partnership agreement between Concur and Egencia will end on March 31, Concur confirmed Tuesday in a written statement.

Declining to comment on what Concur “is or isn’t doing,” Egencia VP of global product and marketing Michael Gulmann said, “We’d like to partner with everyone.”

The firms commented in response to information in a Concur memo obtained by The Company Dime. In it, Concur informed travel management company partners that its “TripLink” relationship with Egencia would be over at the end of this month. “The TripLink feature allowing Egencia to pass non-Concur Travel itineraries to the Concur platform and Concur Expense is no longer available to new clients,” Concur wrote.

Concur’s statement indicated it would “work closely with Egencia to ensure our customers are taken care of through this transition.” Gulmann said he was expecting an ongoing relationship with Concur for clients already using the linkage.

The change follows a Feb. 16 Egencia announcement of plans for integrated travel and expense management through affiliate Traveldoo and other expense providers. Egencia unveiled its Open Sync service, which allows users “to consolidate receipts and credit card transactions directly in Egencia, and then feed them in one click into their expense system.”

Expedia Concur

Bellevue, Wash.
Image: Heston Photography for Visit Bellevue

“This product is currently in beta and will be piloted with a select group of customers and expense partners,” according to Egencia.

In the memo to TMCs, Concur described its 2013 agreement with Egencia as the “first effort to capture non-Concur Travel bookings under the banner of TripLink.” Since then, Concur wrote, TMC resellers and preferred partners “have engaged with TripLink by writing to our itinerary API and integrating” with the Compleat mid-office solution. “These are the areas where Concur will focus going forward.”

The Bellevue, Wash., neighbors nearly four years ago announced the “global” partnership for mutual clients using Concur Open Booking, the former name for TripLink. “Itinerary details, e-receipts and credit card charges are all matched,” the pair said.

According to coverage in The Beat, Egencia officials in 2015 and 2016 said the two companies had a “prominent” partnership that was “much stronger” three years after it started. The publication last October quoted Expedia CEO Dara Khosrowshahi as saying that Egencia did not “want to be in the expense business.” This despite a stated desire to make Traveldoo “more of a global product.”

Then last month, Khosrowshahi told financial analysts “we are working to dramatically improve our capabilities on the expense management side.”

Speaking Tuesday evening by phone, Gulmann said he did not see this as a reversal. “We’re not going into expense management,” he said. “I don’t want to solve, and we’re not solving, the financial side of expense. A lot of expense companies have done a fantastic job of coding and connecting to ERP systems. This is not Egencia wanting to solve the back end.”

Also an Expedia company, Traveldoo separately last month announced its own connectivity and partnership solutions for TMCs. Does Traveldoo have a U.S. product? “Not at this time,” said Gulmann.

How important is integrated travel and expense to Egencia clients? “Some customers have a huge need,” said Gulmann. “Many others do not.” He said Egencia is not ready to share whether expense integration would come with an added fee or be built into travel management services.

The breakup follows termination of a reseller arrangement between American Express Global Business Travel and Concur, revealed in October by Business Travel News. That news followed GBT’s August announcement to acquire Concur competitor KDS. Concur declined to comment on the GBT relationship.


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AA, Concur Announce TripLink Collaboration

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Defense Department Identifies Concur As Vendor For DTS Pilot

The U.S. Department of Defense finally identified the commercial travel system it’s been piloting since June 2016. No one should be surprised that it’s market leader Concur Travel and Expense.

A DOD official told The Company Dime that the pilot is designed to evaluate “the out-of-the-box capability of the commercial-off-the-shelf, software-as-a-service product to meet DOD travel requirements.” The official said the pilot isn’t “a new Defense Travel System, and this is not a new procurement.” Rather, the pilot will inform “future procurement strategy for travel system modernization.”

Primary DTS contractor Northrop Grumman supports the pilot under an existing contract.

The pilot started with a “simplified rule set” taken from the Joint Travel Regulations. It is scheduled to run for about 18 months.

According to information sent by the official, DOD is using “an agile implementation approach.” That means no customization.

“This will allow the department to assess the feasibility of the COTS/SAAS solution as well as identify opportunities for policy simplification and changes to current DOD business processes,” according to the representative.

Defense Travel System

Image: Thinkstock

The next steps are to add users, expand the rule set and test connections to DOD’s financial systems.

Scores of civilian federal agencies use the E-Gov Travel Service. Current vendors are Concur (part of Germany’s SAP) and CWTSatoTravel (part of Carlson Wagonlit Travel). Asked if DOD looked at implementing ETS2, the official wrote: “In making their recommendations for DOD travel system modernization, the U.S. Digital Service considered other travel systems, including systems used by other federal agencies. Their recommendation was to test the feasibility of using a commercial-off-the-shelf, software-as-a-service product for travel reservations and expense management.”

According to a U.S. Digital Service December 2016 report to Congress, DOD spends $8.7 billion on travel annually. DTS accounts for $3.5 billion.

Officials from Concur and CWT declined to comment for this article. Both supported last week’s GovTravels 2017 event organized by the National Defense Transportation Association.

Marques Tibbs-Brewer, a Concur regional sales executive, spoke there during a panel discussion. Later, on NDTA’s Facebook page, he discussed DOD’s new approach. “Right now, the government uses very specialized products that the rest of the world isn’t using,” he said. “Getting access to the commercial environment will allow them to refine their processes based upon best practices throughout the travel industry.”

More effective policy implementation and “access to innovation,” Tibbs-Brewer said, would mean a better user experience. He added that a commercial approach improves access to data, and therefore decision-making, “as opposed to arbitrarily making decisions based on assumptions or presumptions or even reputation.”

Tibbs-Brewer pointed to security as one challenge. Protecting information is important, he said, but not “over protecting it to the point where it doesn’t result in a good user experience.”

Meanwhile, DOD is gearing up for future travel management company solicitations. A request for information in January sought input. Listed interested vendors include Atlas Travel and Technology Group, BCD Travel, CI Azumano Travel, Cornerstone Information Systems and Sun Travel.

DOD also is piloting its first centralized lodging program. It began in summer 2015 with seven sites and, as of January 2017, had grown to 50. The program will run through 2019.

According to the DOD official, the lodging pilot so far has helped the department save $640 million.

Preferred properties have a 78 percent customer satisfaction rate, according to DOD traveler surveys last year. DOD also noted that it began conducting site inspections to ensure properties meet its safety standards.


DOD Piloting New Defense Travel System, Asking For Travel Management Company Capabilities

CWTSatoTravel Wins 20 ETS2 Accounts, Preps Government App

With Its Replacement Under Consideration, Old Defense Travel System Gets New Lodging Capability

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Airline-GDS Negotiations Heat Up As Parties Try To Sway Lawsuit’s Outcome

[UPDATE, May 26, 2017: IAG informed industry partners that British Airways and Iberia would add a $10 fee as of Nov. 1, essentially for each one-way trip, on tickets purchased in global distribution systems. The fee will be displayed as a “Q charge” in fare constructions, and included in itinerary fare quotes. Refunds will align with the rules of the fare. The fee will not apply to fully flexible fares, and there are some other exceptions. It will, however, apply to tickets purchased for travel on codeshare partners. More details here.]

[UPDATE, March 22, 2017: U.S. District Judge Lorna Schofield denied American Airlines’ renewed request for declaratory judgment relief. She wrote that the request was “untimely” and “otherwise inappropriate.” Although American’s negotiations with Sabre for a new contract “may be newly imminent, they are not unexpected,” according to Schofield. “Reconsideration on account of a changed, but entirely expected, circumstance is not warranted.”]

The impact of the US Airways v. Sabre trial remains uncertain as motions fly and an appeal looms. Concerned that the effect of the verdict may be limited, airlines are urging the judge to more broadly define it. American Airlines is looking to bolster its position in talks with Sabre for a content agreement that is due to expire this year, according to court filings. United could be next. Delta has been quieter.

With these matters on the horizon for corporate travel professionals, the foreground features deadlines on International Airline Group’s GDS deals. Multiple sources indicated distribution agreements with IAG airlines including British Airways and Iberia are due to expire in June. Some analysts think the company may establish a surcharging program much like Lufthansa Group’s.

Airline companies can be measured by planes, passengers or revenue. For all intents and purposes, the aforementioned carriers plus Air France/KLM are the world’s biggest. As such, the economics of key airline-GDS relationships over the next year or so are in for an evolution, if not a revolution. What could this mean for travel management companies and their clients? Added cost. Tweaked contracts. Uncertainty. Pressure for alternatives.

The changes will differ depending on location, client profile and competitive positioning. Just because, say, British Airways might surcharge GDS bookings doesn’t mean that’s the best strategy for partner American Airlines. AA has far more exposure to its (far larger) domestic market. From that base and for the global corporate market, it has two serious rivals. AA would be hard-pressed to maintain a surcharge program that goes unmatched, as Lufthansa Group has for a year-and-a-half.

IAG CEO Willie Walsh
Image: Stuart Bailey

Further differentiation in GDS pricing is the outcome analysts at Morgan Stanley are modeling, at least with regard to the European carriers. The firm’s Feb. 26 research note on Amadeus suggested Lufthansa’s fee may not go unmatched for long.

“We had thought IAG was very unlikely to make a Lufthansa-type surcharging move, but see it as possible now versus very unlikely previously,” according to Morgan Stanley equities analysts led by Adam Wood. Commenting that “we think” IAG’s GDS deals expire next quarter, the analysts put the chance of a surcharge at 40 percent.

Another analyst who follows Amadeus declined to be quoted by name so as to protect the integrity of commentary he sells to investors. According to this expert, an IAG surcharge is “more likely than not.”

IAG executives in November told analysts they had a new distribution strategy that would reduce cost and increase control, according to company transcripts. They said at least parts of the plan will be revealed this year.

“We have aligned all of our GDS contracts — the negotiation is an IAG negotiation,” said IAG CEO Willie Walsh. He continued:

I believe there is a role for the GDS. We have used them. We will, I think, continue to use them where they are relevant to our business. If they are not relevant to our business, and some of their pricing models suggest that they are not relevant to our business, then we will look at alternatives. However, the plan that we will put in place will be a plan that is appropriate to IAG. We are not going to model this on what anyone else has done because we are not the same as Lufthansa, for example. What they have done may have worked for Lufthansa. It is not necessarily what will work for us.

The unnamed equities analyst believes IAG will no go so far as Lufthansa did. This could mean differentiation by market. In a model where any surcharge is added to the fare, airlines can modulate it based on competitive pricing. “This is not about cost-cutting,” said the analyst. “It’s cost reallocation and revenue management.”

A separate airline technology contracts expert also declined to be quoted by name to protect client relationships. He supported the concept of different approaches by market. According to Morgan Stanley, airlines are less interested in paying GDS firms for simple bookings made in their home markets. For complicated trips booked in foreign markets, GDS distribution is more highly valued. What’s in between varies by degree. The concept of stratified pricing isn’t new, but the tech expert thinks it will become “much more complex, because value-add is the key.”

Noting that Air France’s GDS contracts are due next year, Morgan Stanley analysts described the Lufthansa program as a “win-win” for airlines and Amadeus. Airlines have more control over distribution and can sell more ancillary services when travelers come to them directly. Amadeus gets a higher fee for bookings it still processes, as well as software revenue for new technology built for Lufthansa.

But someone is paying. That would be you, employers of those who travel for work.

The tech expert argued that the surcharge model could not happen in the United States largely due to Expedia’s clout but also as a result of competition. “If the airlines all do it together, it will appear as though they have colluded,” he said. Still, he thinks the U.S. market will go through a process of identifying what distribution services the customer is willing to pay for.

That may depend on the outcome of the latest machinations in the US Airways v. Sabre trial. After the jury found for the airline — that is, American Airlines — Sabre asked the court to set aside the verdict or order a new trial. Its arguments remain under consideration, and Sabre has promised an appeal if they fail.

Meanwhile, airlines have filed their own motions in an effort to clarify the effect of the verdict through a legally binding declaration by the court. Sabre has argued the jury’s decision only applies to past contracts.

Sabre ‘Open’ To Dropping Full Content Contract With AA

According to a court filing, American claimed it “currently faces demands from Sabre to renew imminently the same contract provisions that the jury declared unlawful.” These may include prohibitions against surcharges, content discrimination or direct connect programs. In response, Sabre told the court “there have been no such demands.”

“After the verdict, American asked Sabre for a proposal that did not include terms the jury in this case found to be unlawful,” according to AA. “Tellingly, Sabre has failed to respond.”

According to Sabre, “Putting aside that all contract discussions have been preliminary, Sabre has in fact told American … that Sabre would provide American with a variety of commercial models to consider, including a PCA model.” The “PCA model” refers to a non-full-content agreement in which the airline pays more for booked segments but is free to differentiate content in other channels and, potentially, to surcharge GDS bookings. In a separate filing, Sabre’s general counsel affirmed that Sabre “has informed American that Sabre is open to a PCA agreement.”

Sabre pointed out that the court declined a similar September 2015 request by AA for declaratory judgement. The plaintiff “provides no reasonable justification for reconsidering the court’s ruling, and instead simply rehashes the very arguments the court previously (and correctly) rejected,” according to Sabre. Its attorneys claimed that AA’s and Sabre’s 2012 settlement agreement bars litigation between the parties until at least late 2019. But an AA filing argued that this prohibition does not apply to all circumstances.

The current AA-Sabre contract expires “within a matter of months,” according to AA attorneys.

In its own filing, United indicated that it has a “multiyear” Sabre agreement that began in May 2013. Absent changes to the prevailing contract parameters, United’s attorneys wrote, the carrier “will be faced with what it expects will be difficult negotiations with Sabre when the Sabre agreement is up for renewal.”

Half of United’s bookings go through GDSs and about one in four United customers is ticketed through Sabre, the carrier noted. “Sabre has indicated during contract negotiations that it would only enter into an agreement that did not include its full content provisions if United would agree to pay Sabre fees that were so high that Sabre’s proposal was not economically feasible,” according to United.

Along these lines from a European point of view, the Morgan Stanley analysts wrote that they expect GDSs to “maintain their higher price points that they have gained as airlines turn off full-content agreements. The next negotiation with … Lufthansa will be very interesting as at that point it will have made a concerted effort to get as much business as it can direct. What is left on the GDS (which we still expect to be the majority of bookings) is clearly business that Lufthansa has struggled to shift or which it is uneconomical to shift. We question why a GDS would lower its pricing for those bookings.”

Lufthansa Group also filed a court document supporting AA, seeking a judgment that could help its own case against Sabre in a Texas state court over the surcharge program.

Attorneys for Air Canada wrote that the airline’s “current agreement with Sabre includes parity provisions that deny Air Canada the flexibility to work to expand and enhance its partnerships with other, lower-cost GDSs.”

Sabre dismissed the cooperation of these other carriers, arguing that they merely “seek to gain leverage in ongoing business negotiations of distinct issues in separate contracts.” For example, “Air Canada’s contract with Sabre contains no full-content provision, and the airline’s principal complaint appears to be that it made certain concessions (e.g., a higher booking fee and no guarantee of a neutral screen display) in exchange for that freedom.”

AA had said it also expected Alaska Airlines, Virgin America and JetBlue to support its motion.


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