Can't seem to add an attachment which is a pain so will copy/paste in here
1. BREXIT – Simone Buckley/Mark Cuschieri
The UK travel management community faces a period of uncertainty. The ITM and its members will now be focused on the potential ramifications of Brexit to the managed travel sector and we will be prepared to advise and facilitate the education of the implications to the industry. Article 50 of the Treaty of Lisbon has to be triggered before the end of March 2017 and then a period of 2 years negotiation
2. Data Privacy – All
Data flows and data ownership. Includes:
• PaxIS ¹
• MIDT ²
• Airline contract requirements
• DDS ³
ITM seeks clear statements from the European Commission on rights, ownership and transparency in all issues concerning data.
ITM seeks greater transparency, in order to understand what happens to data, where it goes, how it is used and how it is disposed of. ITM supports the view that data suppliers in general should become more open with corporate buyers in exhibiting their products and demonstrating exactly how and what data are used in them.
ITM welcomes open engagement with IATA on the subject of data privacy and will continue to keep a watching brief in regards to the introduction of its new DDS marketing intelligence data product.
For further information:
¹ PaxIS: Passenger Intelligence Services http://www.iata.org/services/statistics/intelligence/paxis/Pages/index.aspx
² MIDT: Marketing Information Data Tapes
MIDT data reflects bookings made in the major Global Distribution
Systems. This data can be/is sold by the GDS.
³ DDS: Direct Data Services
3. Airline Consolidation: Impact of Alliances & Anti-trust immunity on competition & pricing – Geoff Allwright
For decades, airlines were confined by regulations and protectionism that prevented mergers and the emergence of low-cost carriers.
Liberalization has led to changes, including the right of an EU-based carrier to fly anywhere in Europe. Factors such as a succession of economic downturns, rising oil prices and unsustainable cost bases have driven carriers to forging alliances in order to remain competitive and profitable.
As mergers, acquisitions, joint venture agreements and tight alliance partnerships continue to consolidate the airline market, travel buyers cite stronger pricing power, reduced competition, reduced capacity and a weaker negotiation position as significant concerns. Aer Lingus joining IAG further reduces competition between Irish mainland and UK
Corporations with self-booking tools need to be clear on how alliances, JVs, marketing agreements etc. show to their travelers / bookers and educate them where necessary.
Alliances can sometimes assist buyers when people wish to fly a route with limited competition and they wish to avoid one carrier on the codeshare/JV, they can book the other e.g. avoid LHG
We will monitor competitiveness of impact of consolidation. How can we do this? Is anyone checking fares?
4. Ancillary Fees / Payment Processing Fees . Airlines are unbundling more and more items, from fuel surcharges and GDS fees to baggage – Geoff Allwright
Buyers recognize why airlines in particular are moving to ancillary fee models (increased revenues to create more sustainable business models) but the impact is lack of transparency – fare comparison, payment processing, data collection & budgeting, traveller influence.
Airline CC fees have been introduced to the businesses (such as the BA Payment Admin. Fee and LH Optional Payment charges (OPC)) and these charges may not visible until ticket issuance. – Jenni Joynt
The same can be said about a number of TMCs that appear to be introducing Invoice Fees.
These unbundled items are in the most part being loaded at the back end of the booking process and are not part of the initial fare display.
ITM’s position is that the principal of unbundling appeals to the travel procurement community but the practice is actually less transparent and causes multiple issues. e.g. fuel is unbundled on many carriers but buyers are unable to negotiate a price on that cost. We look for standardization (fare filing, contracting) and data solutions in order to provide the level of transparency required.
Such ‘additional’ fees should be subject to the same level of contract negotiation as do the base fare/s themselves. ITM recognizes that a number of carriers are willing to open such debate; however we seek greater consistency. ITM recommend that all concerned buyers should engage with their Travel Management Company in order to assess the material impact of potential ‘additional’ costs.
ITM requires clarity from the airlines, TMCs, IATA and government on what elements are included in the fare and those outside the core fare; however all such fees should be refundable on cancellation without additional charge if the service or product has not been used.
Furthermore, a) the LHG stance in 2015 – a disproportionate levy we believe announced with no consultation - as well as b) Marriott’s stance on wi-fi - are a worrying trend and c) BA’s decision to change credit card fees with minimal notice. The industry must get better at full corporate engagement (not just with TMCs) before suppliers announce new strategies.
5. Air Passenger Duty (APD) – Geoff Allwright
APD was introduced in 1994 with a £5 rate for the UK/EU and £10 elsewhere. Since then, it has seen several increases and a doubling for passengers travelling other than in economy class (Reduced Rate = economy class; Standard Rate = premium class).
The UK government had originally linked this tax to the environment and this created an expectation that revenues should have been earmarked for re- investment in cleaner aviation. The UK government has since recognized that this has not been the case.
Whilst the principal of APD was not rejected by ITM members, the increases are causing significant concern regarding increased costs to travel programmes and that the levy is not spent on environmental issues. We appeal to the UK government not to add to an already heavily burdened business traveller or indeed exceed those taxes incurred in other European markets. The recent removal of the tax for Under 12s has no impact on the business travel market
ITM has openly supported A Fair Tax on Flying campaign. An alliance of more than 30 leading travel organizations who believe that APD is now too high and that it is negatively impacting on the economic competitiveness of the UK. The campaign is calling on the Treasury to freeze APD pending commissioning a comprehensive study into the full economic effects of aviation tax in the UK, including its impact on employment.
The Board of Airline Representatives in the UK (BAR UK) has also challenged the government to use the debate in Scotland and NI to review the tax and introduce a fairer version for the whole of the UK. Nine regional English airports have also formed a partnership to call for policies to mitigate the effects of any cuts to APD in Scotland and Wales. They say that their passenger numbers could fall by more than two million by 2025 if government plans to devolve APD to Scotland and Wales go ahead. APD has been removed from flights from Northern Ireland airports
6. Airport Expansion – Geoff Allwright (air) / Will Hasler (HS2/3)
Back in September 2012 the Government announced an independent Airports Commission, to be chaired by Sir Howard Davies, on identifying and recommending options for maintaining the UK’s status as an international hub for aviation. The Commission provided an interim report at the end of 2013 before concluding that the Heathrow 3rd runway was their preferred option in June 2015.
ITM recognizes that the UK requires an aviation policy which balances the economic benefits of aviation with its environmental and community impact. However the issue surrounding expansion has been debated for many years without any clear decisive action whilst other countries have not been so hesitant. Successive governments apparently for their own political gain have failed to address the most fundamental challenge facing the aviation industry, namely the pressing need for increased airport capacity.
The current capacity constraints, particularly in the South East, are hurting the UK’s aviation industry, damaging the many businesses reliant upon it; this is also holding back investment in the UK and negatively impacting upon the whole of the UK economy. It is now time for politicians to take some tough decisions.
On 25th October 2016, the Government finally approved a third runway at Heathrow and dismissed for the time being expansion at Gatwick. The IAG supports this move but believes a second runway at Gatwick will probably be needed too in the medium term. We also support the planned expansion of London City Airport and mixed mode operations where this is a viable alternative (departing and landing on the same runway)
A public consultation will now be held on the effects of airport expansion before the government makes a final decision as part of a national policy statement on aviation. MPs will then vote on that decision in the winter of 2017-18. It is unlikely that any new runway capacity would be operational before 2025. Construction is not likely to begin until 2020 or 2021, the Airports Commission has said.
Finally HS2 (London-Birmingham high speed line) must be connected to Heathrow (as was originally planned) so that we can have an effective integrated rail & air transport policy that exists in places like Germany. This will allow people to step off long haul or short haul international flights and connect to the North of England and even Scotland when rail times come down further. Crucially in addition, fewer short haul flights means more slots can be released to increase long haul flight capacity further.
7. HS2 & 3 – Will Hasler
The Government has published plans for the second phase of the HS2 high speed rail network from Birmingham to Manchester and Leeds. ITM welcomes the Government’s commitment to the extension of the UK’s high speed rail (HSR) network. To harness HS2’s full economic potential, we believe it must complement, connect and not be a substitute for airport capacity. At present the first phase of HS2 does not deal with the need for connecting London airports and key regional cities within the UK. The FT reported that this would not happen before 2033 (March 2015).
HSR has the opportunity to be a viable alternative to short-haul air travel and reduce the strain on Heathrow by freeing up slots. It is a real opportunity to create an integrated and modern transport system that will ensure the UK is positioned to compete more effectively with its European and global counterparts in terms of connectivity.
We urge the Government to rethink HS2’s route to ensure that it connects every part of the UK to the UK’s global gateway and an essential joined up approach between aviation and high speed rail with the Department for Transport. ITM also urges Network Rail to proceed with the upgrade of the Trans Pennine route between Leeds and Manchester which is heavily used by the business community and was shelved in the summer of 2015.
An initial outlay was approved for HS3 in the March 2016 Budget (East – West line from Hull to Liverpool via Sheffield, Leeds and Manchester). However following David Cameron’s resignation and the demotion of George Osborne, much will need to happen before HS3 and even HS2 can become a reality.
8. Distribution Fragmentation – Lee Whiteing / Will Hasler / Geoff Allwright
Anything which encourages corporate travellers to bypass preferred booking channels is a disruptor. e.g. Marriott announcing anyone who books through Marriott.com who is a Rewards member gets free wi-fi. Airlines sending marketing material direct to travellers encouraging them to book on their websites
Key to airlines wishing to distribute away from the GDS is their New Distribution Capability (NDC). This is an IATA led industry initiative to develop an XML-based language standard for communications between airlines and travel agents/websites. Currently approximately
60% of airline ticket sales by value are sold by travel agents (including travel management companies and online travel agencies (OTAs)).
Currently, tickets sold via travel agents cannot offer fare bundles or "a la carte" products such as priority boarding, a free checked bag or extra loyalty points. XML makes it easier, faster and cheaper to provide the customer with more information about fare alternatives, ancillary services, on board amenities and graphics such as pictures or seat maps.
The NDC project has entered a pilot phase in order to validate and enhance the NDC business requirements and schemas. Some projects have gone live.
ITM encourages any increased opportunity for product and service innovation across the industry, leading to less fragmentation of content. However whilst we can see the benefits in a B2C environment, we have yet to see if NDC will create any real benefit for the corporation who is paying for travel, or if this opportunity is simply another attempt to reduce airline distribution costs at the expense of the buyer in the form of reduced price transparency and more complexity in the distribution process. Therefore it is key that if implemented, the ITM buyer membership is fully aware that some of the distribution cost savings should be reflected in future airline price negotiations.
Buyers will continue to seek access to full content, transparency, consistent delivery of competitive pricing, appropriate safeguards to unauthorized buyer profiling and consistency across all distribution channels. All these key factors are seen as 'must haves' in any distribution channel which enable travellers to make informed buying decisions.
We are particularly concerned with regards to any pricing based on planned traveller profiling, which could disadvantage the corporate buyer and result in differentiated pricing for travellers that will drive business travellers to unknowingly violate their company’s travel policy and raise airfare costs for corporates without their knowledge or consent.
We will continue to stay closely involved in developments on NDC, engaging with supplier partners (Airlines, GDS and GTMC) as well as our partnership with GBTA Europe, to ensure buyer interests are at the heart of these developments. In the meantime, we expect TMCs to be proactively communicating to their customers what NDC will mean for TMCs and their clients.
Ultimately buyers need to be able to control the output from suppliers and not allow them to upsell for example which could add extra cost.
Irrespective of whether carriers adopt NDC, it is vital that if carriers wish to bypass the GDS that they give the corporate community a viable alternative. LHG definitely did not – they assumed a) all corporationss booked over the phone with TMCs and b) that their agency portal was fit for purpose. It clearly was not. easyJet for example allows people to book via the GDS or via their API