IATA ' Are We On A Collision Course

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• IATA . Are We On A Collision Course?

Mike Platt BTI UK
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IATA
International Air Transport Authority
What is it? Why is it there? What impact does it
have? What input should we have? What future does
it have?
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What Is It?

• An Airline Trade Association (274 members)
• A Secretariat working for airlines with three
  main purposes
• Infrastructure
• Standards
• Distribution System

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What Is It?
68 Offices covering 146 countries Based in
Montreal and Geneva Fundamentally unchanged from
its beginnings Full of jargon and mystery
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They define themselves as .
AIRLINES
IATA
AGENTS
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My View of IATA

• Servant of the airlines
• Vehicle to pass and protect rules
• Blurred responsibility and accountability
• Sponge not meat

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My View of IATA
Indispensable In urgent need of total overhaul
and re-focus Why? Because it is based on a
Principal/Agent relationship
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Why Change?

• The Principal/Agency relationship no longer
• exists
• The old distribution model is gone for good
• Airlines are doing their own thing
• They cannot police own members
• The arrival of new players and stakeholders

The market has changed but IATA has not
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Why Change?
They do not pay us any more The corporate does
instead Yet They still require us to follow their
rules
Outdated, expensive and biased
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Why Change?
Rules agreed by PACONF However Only serious input
is from airlines Need for 100 approval So No
change Greatest catalyst European Commission
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AIRLINES
IATA
AGENTS
Client
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Focus on Distribution System

• Agency Programme - Accreditation
• - BSP
• - Regulation

Badly in need of re-negotiation and reform
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IATA In Summary

• Performs important tasks
• Totally controlled by suppliers
• Mystifies decision making
• Unable to reform itself

Writes the rule book and polices it
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How Is IATA Impacting Corporates
The airline industry is not moving quickly enough
to recognise the corporate migration in travel
management! For example International Service
Centres
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Case Study
Client X in 38 Countries
Two Options Local Service every country
Single Service one country
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Issues
Tickets can be issued - anywhere -
everywhere But Lowest Fare?
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Ticketing Outside Country of Origin
- Turin/Rome/Turin - 404.00 For sale
anywhere - Same journey - 90.00 For sale
in Italy only!!
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Ticketing Outside Country of Origin
Turin/Frankfurt/Hong Kong return Cheapest
Economy fare 653.00 for sale anywhere 553.00
for sale in Italy only
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Grey Market Fares
Cork/Amsterdam/Beijing return 6,464 for sale
anywhere 1,985 for sale in Ireland only
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Therefore, to ensure the corporate client
obtains the best fare, local market conditions
and ticketing should be implemented.
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Airlines often want separate IATA
numbers, licences and printers to track, record
client deals.
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Example Cost Per Location (UK)
Printer/Maintenance 2,430 p.a. Licence 1,320
Safe ( Inst) 1,600 Imprinter Inst
630 5,980 Plus security, training,
inspection etc.
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Our client in 38 countries albeit serviced in one
country must have 38 national/local licences 38
printers Staff to issue, report,
BSP/ARC Facilities office space Technology - MIS
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Cost for 38 countries The licences -
51k Printers - 92k Staff/Facilities - 460k
Total 603k
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Single Centre Cost - Licence Staff 269k
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• Separate Licences
• Duplicate Resources
• Billing
• Payments
• Additional kit/printers
• Cost to client 334k

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Local Ticketing Even with international
service centres. Tickets must go back to the
local country for issue to avoid potential
currency premiums.
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Airline - costly idiosyncrasies Combining -
net published fares - prohibited mixed
airlines - client has to buy two one way
tickets - costs - transactions air
fares rates of exchange!
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• Airline and GDS Fare Guarantees?!
• Guarantee for the GDS quote.
• Reserve the right to charge an additional amount
  if the fare is wrong by the agent.
• No commitment to apply the most advantageous
  combination to the corporate/traveller.

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Example Lon-Dubai-Jburg-Lon Fare quote -
4,918.00 Business Class Best combination Same
Class - 4,001.00 same airline Its legal too!
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ACTE - Driving Positive Change
A Multifaceted Approach Toward a More Efficient
Market Environment
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Objective

• Drive positive changes to current IATA
  regulations
• that result in
• The creation of a Europe-wide BSP,
• Simplified travel agent accreditation on a
  Europe-wide company basis not by location,
• The ability to book, fulfill, settle, and receive
  tickets anywhere within the EU,
• Complete availability of fares and transparency
  on tickets,

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Objective

• Drive positive changes to current IATA
  regulations that
• result in
• Binding Service Level Agreements between agents
  and airlines,
• Ongoing formal collaboration with associations
  representing corporate buyers to identify and
  remove obstacles inhibiting efficiency.

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ACTE Strategies

• Pressure IATA from multiple sources to expedite
• regulatory changes.
• Raise awareness within the industry of the need
  for
• regulatory change.
• Estimate and communicate the financial impact of
• current IATA restrictions.

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A Multifaceted Plan of Action
Pressure from all sides
280 Airlines
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A Multifaceted Plan of Action
CoCoA
Utilize official IATA channels to effect
regulatory changes Support CoCoA coalition
efforts (ACTE, Paragon, GEBTA)
280 Airlines
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A Multifaceted Plan of Action
Build influence with key EC
representatives Measure and communicate economic
impact
CoCoA
EC
Utilize official IATA channels to effect
regulatory changes Support CoCoA coalition
efforts (ACTE, Paragon, GEBTA)
280 Airlines
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A Multifaceted Plan of Action
Calls and letters to airline executives Raise
awareness financial impact, need for change Get
message to airlines IATA representatives
ACTE Board
Airline HQs
Build influence with key EC
representatives Measure and communicate economic
impact
CoCoA
EC
Utilize official IATA channels to effect
regulatory changes Support CoCoA coalition
efforts (ACTE, Paragon, GEBTA)
280 Airlines
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A Multifaceted Plan of Action
Calls and letters to airline executives Raise
awareness financial impact, need for change Get
message to airlines IATA representatives
ACTE Board
Airline HQs
Build influence with key EC
representatives Measure and communicate economic
impact
CoCoA
EC
Utilize official IATA channels to effect
regulatory changes Support CoCoA coalition
efforts (ACTE, Paragon, GEBTA)
280 Airlines
Airline Sales (Local)
Raise awareness of regulatory impact on
corporations Communicate estimated financial
impact Pass message on to airlines IATA
representatives
Corporate Buyers
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WE NEED YOUR HELP TO SUCCEED!
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ACTE Country Champions
Andreas Konkel, Carl Zeiss Germany
Mike Perkins, Cisco Systems, UK Mark Avery, PwC,
UK
Ann Cleveland-Oey, Global Travel Manager, Warsila
Corporation, Helsinki, Finland
Nadine Dewart, BMC Software, Netherlands Elisabeth
Koblik, Hosteen, Belguim
Vic Van Den Brandeler, Walt Disney Company, France
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ACTE Country Champions
Andreas Konkel, Carl Zeiss Germany
?
?
Mike Perkins, Cisco Systems, UK Mark Avery, PwC,
UK
Ann Cleveland-Oey, Global Travel Manager, Warsila
Corporation, Helsinki, Finland
Nadine Dewart, BMC Software, Netherlands Elisabeth
Koblik, Hosteen, Belguim
?
?
?
Vic Van Den Brandeler, Walt Disney Company, France
?
?
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ACTE Tools to Support Your Efforts

• Find ACTE tools at www.acte.org , click on IATA
• initiative.
• ACTE IATA Perspective, Regulating Efficiency
• List of Questions to ask your local airline
  representatives
• Case study measuring financial impact of outmoded
  IATA regulations use to estimate the impact on
  your organization
• Feedback form tell us which airlines you have
  approached, what was the response, ideas to speed
  change.

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Together we can drive change
ACTE Board
Airline HQs
CoCoA
EC
280 Airlines
Airline Sales (Local)
Corporate Buyers