14 August 2000

Big business travel budgets are fixed firmly in the sights of British Airways’ planned $100 million (£67m) corporate travel portal.

The ailing airline, currently embroiled in merger negotiations with Dutch carrier KLM [WAMN, 13-Jul-00], says the project will reduce costs and lessen its dependence on high-ticket global reservation networks like Galileo and Sabre. More importantly, BA believes the system will enable it to forge a closer relationship with its key customers.

Corporate customers will be able to access the new site directly – with the facility available both to individual staff and inhouse travel departments. According to BA’s e-commerce director, Pat Gaffrey, companies will be able to book flights on BA and other airlines, as well as accommodation. "Although we will be linked with all airlines, we might negotiate a lower rate on a particular routes with the customer,” says Gaffrey. “In that case, only, those flights will appear on the screen."

Currently, BA’s selling costs account for 15% to 20% of its £8 billion annual overhead. Gaffrey sees the internet as the channel of the future for ticket sales, replacing airlines’ current reliance on travel agencies and third party computer reservation systems (CRS).

“Some $5.5 billion in airline tickets were sold over the internet in the US last year. Europe is catching up. I think the CRS are facing profound questions,” Gaffrey says. “They have to do it on a more cost-effective basis."

The new system will not be offered to BA’s largest corporate clients until early in 2001, but a cut-down, simpler version will be available to small and medium-size businesses before the year end.

News source: The Times (London)