Philadelphia BTA

Strategic Issues In Travel Management

Kevin Mitchell

Business Travel Coalition

Strategic Issues In Travel Management

What I Will Cover

PAX Rights Legislation

Outsourced Aircraft Maintenance

Registered Traveler

Strategic Issues In Travel Management

PAX Rights Legislation

Strategic Issues In Travel Management

The Background

• January 1999

• New Year’s 2006; Valentine's Day 2007

• 2007 the worst summer in history delays, cancelations, service, comfort

Strategic Issues In Travel Management

Some Stats

• Worst summer since 1995

• 25% flights nationwide delayed Vs. 22% in ‘06

• 50% flights into NYC area delayed

• Last 3 months 32K flights canceled Vs. 16K in ‘06

• 11K corporate jets Vs. 7K in ‘00

Strategic Issues In Travel Management

Growing Calls for

Congressional

Intervention

Strategic Issues In Travel Management

A Government, Societal and Free Market Issue

FAA Modernization NIMBY

Airline financial crisis and declining service

Hub economics and over scheduling

Operational meltdown contingency planning

No National Air Transportation Policy

Security hassle

Strategic Issues In Travel Management

Considerations

• Threshold for legislation 36 Out of 7 Million Flights 5 Hours

• On the other hand it’s the whole experience

• 700 million to 1 billion in 7 years

• We must deal effectively with this; much at stake

Strategic Issues In Travel Management

The Concern

• Current options inadequate

• PAX legislation harmful and will waste precious time

• Airlines unlikely to respond sufficiently

• Digging a hole we may not be able to climb out of

Strategic Issues In Travel Management

BTC Testimony

Strategic Issues In Travel Management

BTC House Testimony October 26

• The Problem bad motivation begets bad ideas if nothing done, 2007 just a footnote pressure mounting in an election cycle

Strategic Issues In Travel Management

BTC House Testimony October 25

• The Problem

• A Solution Reverse-Sunset legislation National Academies of Science TRB well-vetted ideas criteria for DOT Inspector General

Strategic Issues In Travel Management

BTC House Testimony October 25

• The Problem

• A Solution

• The Benefits• avoid punitive, ill-conceived fixes in short term• encourage all-out airline campaign• well-vetted ideas if we need them in mid term

Strategic Issues In Travel Management

Outsourced Maintenance

Strategic Issues In Travel Management

Perfect Storm - Summary

• 9/11

• airline race to the bottom on costs

• FAA sleeping on the Job

Strategic Issues In Travel Management

9/11

• All attention on security

• Airlines, press, government

Strategic Issues In Travel Management

Race to the Bottom

• New security costs, LCCs, SARS, war, bankruptcies, jet fuel…

• 147,000 jobs lost

• Thousands of years of maintenance experience gone

• Maintenance outsourced overseas…

Strategic Issues In Travel Management

FAA Asleep

• Airlines as customers, partners

• Reliance on ATOS

• FAA staffing down as challenges grow

• System created in a different era

• 60 days notice - China

Strategic Issues In Travel Management

House

• More inspectors

• If same system, still have a problem

Strategic Issues In Travel Management

Senate

• Go after systemic problems

• Redefine FAA role - again

• Require airlines to pay

• Mandate outsourcing in U.S.

• Reciprocal agreements; without notification

• Consider a national air transportation policy

Strategic Issues In Travel Management

Registered Traveler

Strategic Issues In Travel Management

Why RT Today?

• Security – move passengers from unsecure areas to secure areas

• Airline Profitability - return of high yield business travelers

• Airport Real Estate - RT provides more real estate without more lanes (EZ-Pass)

• Business Traveler Predictability - convenience; corporate efficiency

Strategic Issues In Travel Management

RT Today – Green Light for Fast Lanes

• TSA – rules, roll-out, oversight

• Airports – embracing – SFO, DEN, MWAA, ATL

• Corporations due diligence - purchasing guidelines - NBTA Enrollment - commitments

• Industry Partnerships - now is the time

• Airlines – stuck in neutral

Strategic Issues In Travel Management

Who are the Players?

• FLO Corporation

• Unisys – RTgo

• Verrant Identification Systems

• Verified Identity Pass – CLEAR

• Vigilant Solutions

Strategic Issues In Travel Management

Lanes Open Today

OrlandoCincinnatiIndianapolisSan JoseJFK - Terminal 1,4,7Jacksonville, FLAlbany, NYNewark Terminal BRenoLittle Rock

Opening SoonHuntsvilleSan FranciscoLGA – Main Terminal

RFPs in Process

Washington ReaganWashington DullesBaltimoreDenverOaklandAtlantaMiamiFt LauderdaleAnchorageLAXSan Antonio

Airline ControlledJFK-LGA-EWR

Strategic Issues In Travel Management

RT 1.0

• Born of TSA pilots• Focused on lane only• Rigid business model• Today – front of line only • Future – no removal of shoes, coats, laptops

Home/Office Destination

Airport Security

Strategic Issues In Travel Management

RT 2.0

Limo Services

Airport ParkingAirline Clubs

DestinationAirport SecurityHome/Office

Remote BaggageCheck-in

Concession Discounts

Global AssistServices

Airline Status Upgrade

Thank You!