YOUR OPPORTUNITY TO MEET FACE-TO-FACE WITH YOUR
COLLEAGUES AND BEGIN RESHAPING THE FUTURE OF THE INDUSTRY

RECOVERY - How do we get there?
The fifth ACTE Summit was conducted in Detroit on Thursday, October 11. There were 35 participants representing virtually all segments of the business travel industry.


Major Themes
 

Security issues were discussed in Detroit at some length. However, the airline-GDS, buyer-supplier relationships were the main areas of discussion.

It was acknowledged that the domestic U.S. airfare structure is no longer meeting the needs of any of the principals involved. The airfare structure is overly complex and contributes to mistrust. Buyers desire a rational and simplified airfare structure and are willing to consider a range of commitments to airlines in return for a more sensible airfare structure.

It was noted that in order to move to a new type of airfare model, there would have to be significant communication between buyer and supplier. Currently, there is not a deep reservoir of trust among principals.

It was also noted that the airlines need to look at all process and systems costs associated with "manufacturing," selling and distributing their products. High labor costs were also mentioned as a significant factor impacting the current financial crisis in the airline industry. Buyers do not want to accept the premise that the industry in two years will be smaller with much higher business airfares until and unless all airline costs are addressed-including labor.

There has been a lot of talk since 9/11 about the need for true "partnering" among industry principals. It was pointed out that an important task for the industry is to define what exactly partnering means. Lip service has been given to partnering for too long. If it is merely a euphemism for securing higher prices from buyers, then much opportunity will be lost with regard to fixing intractable industry problems.

One participant questioned how the industry could possible get down to the work of reform when there is so much mistrust and so little effective communication. The moderator suggested that perhaps those industry suppliers, distributors and buyers who do maintain and nurture relationships built on trust and open communications is the right place to look for leadership.

To paraphrase former GE chairman Jack Welsh: "Think big, act small, move fast." This expression would seem to characterize the current situation in the travel industry. There is a very limited (months) opportunity for the industry to work together to advance reforms that will benefit all parties. If we miss the opportunity, we will likely be mired in increasing complexity and frustration as all manner of responses and solutions to the current financial crisis are implemented.

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