May/June 12

MAY/JUNE 2012

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Welcome FOR COMPANY TRAVEL & MEETINGS BUYERS ISSUE 56 MAY/JUNE 2012

Editor's comment

Paul Revel Editor, Buying Business Travel

Business in Iraq Where fortune favours the brave

Cover may-jun finV1b.indd 1 Private jets

Flying high despite the cutbacks

Apocalypse when? Tackling a total

technology meltdown 24/04/2012 15:37 Something in the air... ISSUE 56

Editor Paul Revel Executive Editor Bob Papworth Managing Editor Mike Toynbee Art Director Annie Harris Designer Javi Otero Sub Editor Richard Rees Contributors Caroline Allen, Mark Caswell, Catherine Chetwynd, David Churchill, Amon Cohen, Felicity Cousins, Martin Cowen, Mark Frary, Rob Gill, Anne Godfrey, Jonathan Hart, Gareth Morgan, Gary Noakes, Chris Pouney, Dave Richardson, Ian Skuse, Diane Steed Publisher Chris Mihalop Production Manager Jamie Halling Editorial tel number +44 (0)20 7821 2715 Editorial fax number +44 (0)20 7821 2701 Email address editor@buyingbusinesstravel.com Advertising tel +44 (0)20 7821 2733 Advertising fax +44 (0)20 7821 2701 Email address sales@buyingbusinesstravel.com Front cover image: DREAMSTIME

Buying Business Travel is published by Panacea Publishing International Ltd, 5th Floor, Warwick House 25-27 Buckingham Palace Road London SW1S 0PP United Kingdom Tel +44 (0)20 7821 2700 Fax +44 (0)20 7821 2701 Managing Director Julian Gregory Editorial Director Tom Otley on behalf of Business Travel Media Holdings Ltd Chairman Ian Dockreay Managing Director Julian Gregory

© 2012 Business Travel Media Holdings Ltd and Panacea Publishing International Ltd. The magazine is entirely independent of all commercial interests within the travel industry. Unsolicited manuscripts will not be accepted for publication. The opinions expressed by contributors are not necessarily those of the publishers who cannot accept responsibility for any errors or omissions. ISSN 2041-4242 www.buyingbusinesstravel.com

MAYBE IT’S THE SEASON, but mixed messages seem to be blooming. In this issue you’ll find analysts and experts despairing of the government’s lack of joined-up travel policy – from aviation to roads to border controls – yet at the same time noting glimmers of light: acknowledgement of the need for more airport capacity, and David Cameron citing the importance of business travel. Meanwhile, on the one

hand, companies are striving to drive down costs with better rail booking; on the other, private aviation is seeing modest growth and even, whisper it, green shoots of recovery from their clients in the finance sector. Airlines are investing in new premium products and routes. From the trade associations and lobbyists, we see renewed efforts to drive the message home to government that business travel is not a carbon-spewing luxury cash-cow, but a vital source of jobs, growth and revenue for the UK. And, of course, this issue contains our eagerly anticipated annual top 50 TMCs guide – the figures show they're not having an easy time, but they are winning new business and investing in innovative online technologies. Talking of online developments, if you

There

are even, whisper it, green shoots of recovery...

new website. And you’ll also find digital editions of the magazine, which you can read offline while on the move, and via apps on iPads, iPhones and Android devices. So what is BBT ’s sage advice for these challenging times? When the going gets tough… the tough let their hair down at an excellent party. Namely, BBT’s hugely popular Summer in the City party, in association with Qatar Airways and also sponsored by Chambers Travel Management. We are holding it at the splendid Lutyens-designed BMA House in London’s Tavistock Square. So put July 4 in your

diary, and for more information see p10 or visit our website. It’s sure to be a party to remember. And don’t forget, it’s soon time to

start submitting those all-important submissions for the Business Travel Awards 2013. The website will be open for online submissions in June – so keep an eye on buyingbusinesstravel. com for details. In the meantime, contact egordon@panaceapublishing.com for early-bird discounts on table bookings. By the way, there’s still time to win one

haven’t visited buyingbusinesstravel.com recently, please check out our sparkling

Executive aviation PRIVATE JET

While the hatches remain battened down on corporate travel budgets, why is the private jet sector seeing “green shoots of recovery”? Paul Revel reports

“EXCLUSIVE” – THERE’S AN OVERLY and often inaccurately used word, along with the much-abused “unique”. However, for once both may apply here at Farnborough airport in Hampshire. Owned and run by TAG Aviation, it’s the only airport in the UK exclusively for private jets: no hobby aircraft, no commercial flights, nothing with more than 30 passengers. And it does indeed feel exclusive;

the stylish black-and-white terminal lounge looks more like a chic boutique hotel than an airport (of course, if you want a chic boutique hotel, as private jetsters sometimes do, the TAG-owned Aviator is just across the runway). Gleaming Gulfstreams, Lears and Falcons roll up to the plate- glass windows, disgorging their VIP passengers. More expensive hardware shelters in 240,000sq ft of spotless hangars. The airport boasts heritage and glamour: Samuel Cody piloted the

first powered flight in Britain here in 1908, and more recently it starred as a location for James Bond in Quantum of Solace. TAG has invested more than £100 million in the airport in the last 10 years, opening the award-winning Reid-designed terminal in 2006, and buying the freehold from the MoD in 2008.

PAYING THE PRICE But let’s cut to the chase: while most corporates are haggling over maximum hours in economy, switching to no-frills and generally tightening travel purse-strings, who on earth is using private jets – and why? I put the question to TAG Aviation

area director Ashley Namihas. He says: “An IPO [initial public offering] is a good example of where a senior leadership team needs to do a roadshow, flying into sometimes three cities in one day. It’s a cost- to-value ratio that really works. The price is a miniscule part of the

overall costs of an IPO – the fees for auditors, underwriters and so on have gone up 17 per cent since 2005. Then try and measure the importance of the team using the jet as a conference room, ready to be at their best when they hit the ground. It’s a huge step in a company’s life. Also, the schedule can change by the hour, and you simply couldn’t achieve that timetable using commercial flights.” A travel buyer for an international

investment bank cites similar advantages for a hectic itinerary of meetings when the stakes are high. He says: “One of the biggest advantages is avoidance of all the unnecessary delays at commercial airports, leaving schedules undisrupted. These jet services are available 24/7, 365 days a year. You don’t have to follow a time schedule – the jet will take off as per your requirements.” So if the finance sector is a

mainstay of private aviation, is everyone in the business struggling

Executive aviation

to survive after the 2008 financial crash? Another travel manager in the banking sector tells me they now only keep a relationship with a jet provider for any emergency contingencies that might arise. “In terms of general traffic, we saw a slump in 2008,” says TAG’s Namihas. “But since then demand is returning, though not quite back to 2008, which was a culmination of a 10-year boom. We’ve seen 5-10 per cent year-on-year growth since 2008. The IPO is one form of roadshow, but, of course, there’s lots of others: senior management may need to regularly visit several factories around the world, for example. It’s quite a popular modus operandi – recruiting less senior people but making them more mobile.” He says TAG’s spread of business

– owning, managing, maintaining and chartering aircraft for and to a diverse range of individuals and Fortune 500 companies – has helped cushion it against the volatility of the markets. “Oil-and-gas is a big part of our business. Having a duty of care to employees in this area is a core principle – private aviation is safe, and you can control your environment and security. TAG has been through the International

Association of Oil & Gas Producers (OGP) audit process, and we train other operators on best practice.”

IN THE CITY My next touchdown is the Jet Centre at London City Airport (I arrive via Docklands Light Railway, rather than the Gulfstream I’d hoped for). Its proximity to London’s financial

“These jet services are available 24/7, 365 days a year– you don’t have to follow a time schedule”

heart must surely be both a strategic trump card, and a liability when the banks take a nosedive.

Darren Grover is chief operating officer at the Jet Centre. He says: “We saw a niche market here at London City in 2002, and experienced massive growth up to 2007 – from nothing to 15,000 flights a year. But as 95 per cent of our business is in and out of Canary Wharf and the City, we got hit pretty hard. There was a sharp decline in 2008, and last year we had 7,000 flights. But we are seeing the green shoots of recovery. It’s a very hard sector to forecast, but my best estimate, based on data

trends, is that we’ll see around 7,500 flights in 2012.” These signs of recovery are echoed in a recent report in The New Y

ork

Times, suggesting a growth in investor appetite for European IPOs this year, citing two big instances in March raising around $2 billion; and the likes of Pricewaterhouse Coopers also talking about “green shoots”. The Jet Centre is used by several key players in the market. Its biggest client is operator and fractional ownership specialist Netjets, which accounts for 50 per cent of business. Netjets has the largest of several smartly appointed private lounges, but the boutique-terminal’s creature comforts are not the point. “I don’t really want you in the lounge,” smiles Grover. “Because if you’re there I’m delaying you, unless it’s weather or some issue out of our control. We don’t sell anything tangible – it’s all about time.” I hear this from almost everyone in private aviation I speak to – where once status and prestige may have been the drivers, the old adage “time is money” now appears to be core to the whole sector.

Grover says the airport’s mission

is to get departing passengers from car to plane in eight minutes, and vice-versa arrivals in six. “That’s our

3 44 45 Farnborough airport, owned and run by TAG Aviation

of two £100 John Lewis gift vouchers – go to buyingbusinesstravel.com to complete our quick reader survey, which will help us ensure BBT is providing you with all the content you need.

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MAY/JUNE 2012

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Rail bookings

Rail bookings

TICKET TO RIDE

Rail is upping its game as a vital part of corporate travel programmes, as buyers demand ever more sophisticated booking and ticketing solutions. Dave Richardson reports

IF YOUR BUSINESS has a regular requirement for rail travel and you are not using an online system to book in advance, you are losing out. Walk-up fares (referred to by National Rail as Anytime) increased by an average of 6 per cent in January and will increase by a similar amount in January 2013, as the government shifts more of the cost of running the railways from the taxpayer to the traveller. High-profile TV advertising by

Thetrainline.com, and also by new entrant Redspottedhanky, has pushed the “book ahead” message through to consumers, too. Many people now understand that big savings are possible by advance booking, but not on every train and every route. High capacity, high

frequency services to and from London offer the best opportunities to make savings, especially if booked well before the deadline of 6pm on the day before travel. With most businesses now

understanding the need for advance booking, the major online retailers Evolvi, working exclusively through travel management companies (TMCs), and Thetrainline.com are concentrating on enhancements to management information (MI) and policy compliance, and new forms of ticketing. They have yet to feel the effects of any new competitors, but Redspottedhanky has developed a system for business and

MOBILE TICKETING – THE NEXT BIG THING? 62

SMARTPHONES HAVE BECOME so prevalent over the last year or two that there is growing demand for mobiles to be used to deliver rail tickets (as a barcode) and other information. But as with other types of non-conventional ticketing, systems suppliers are limited by what the rail industry can support. As with plain paper-ticketing, the major problem is fraud – which is why

only advance tickets, linked to a seat reservation, can be sent to a mobile device or printed on plain paper. There is nothing to stop someone printing out a full-fare Anytime ticket again and again until train operators develop the technology to read and then cancel these tickets electronically. Smart-card ticketing – similar to the Oyster card in London but applicable

to pre-booked tickets nationwide – is another issue. Although the card can read when a journey is completed and is not susceptible to fraud, train operators don’t yet have the technology at ticket gates or on hand-held devices carried by the train manager to process a smart card. Introducing this technology will be made a condition of new franchises, but, realistically, it is at least several years

away. Several major franchises are up for grabs in the next 18 months, including those held by Virgin Trains, First Great Western and the East Coast route. Thetrainline.com was the first online

retailer to introduce a mobile app, but this is aimed at consumers and does not have specific business applications. The new app just introduced by Evolvi is, however, a full business system.

Clare Morrissey, head of account

management for Thetrainline.com, says: “For business customers, the phone is good for receiving a bar-coded ticket but not for the end-to-end transaction. Most have laptops on which they can do all the rest. “TOD at station ticket machines is the

primary solution. Some large customers have their own ticketing machines on site, but there will be less of a requirement

for these when we roll out plain paper- ticketing. This is only available on CrossCountry trains at present, but other operators will soon follow. Because only advance tickets can be printed or sent to mobile phones, it reinforces the message about booking in advance to save money.” She adds: “The reality is that given

short franchise terms left to run, many train operators have been slow to

63

Raileasy4business has also entered the market. Click Travel has created its own system, Open Rail, which was demonstrated at this year’s Business Travel Show. The event was also used to debut

Evolvi-ng (the “ng” is for “new generation”), the most significant re-launch for Evolvi since it started six years ago. New features include pre-trip authorisation, a shopping

“Without purchasing controls in place, the average ticket value can go through the roof”

basket where you can book up to eight trips for up to eight passengers, a single-click suggested fare, and instant ticket-on-departure (TOD) at station ticket machines, rather than having to wait two hours before you could collect a ticket at the station. Evolvi sales director Jon Reeve says

developing the shopping basket was complex, due to the need to attribute cost-centre codes for, potentially, up to 64 separate transactions. Pre-trip authorisation is also critical

for driving down costs. “Without purchasing controls in place, the average ticket value can go through the roof,” he says. “The average ticket value booked through Evolvi last year was £60.85 compared to £61 in 2010, despite the introduction of a general 6.2 per cent fares hike at the start of 2011. We can see that more corporates are booking in advance, as the average ticket value in 2009 was £66.”

RECORD YEAR Evolvi notched up a record year in 2011, with a 9 per cent rise in revenue to £286 million and a 10 per cent increase in transactions to 4.7 million. Average ticket values have been kept flat, not only because more people buy advance tickets, but

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