Aviation Security and the Cost to Travellers-Sep 2006


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SECURITY EXPERTS aren't anticipating wide-scale bans on carry-on luggage in the wake of the recent British terrorist crackdown, but closer inspections are
probably here to stay.

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Aviation Security and the Cost to Travellers-Sep 2006

  1. 1. September 2006 Vol 3, no 13 Carry-on confusion By Allan Leibowitz SECURITY EXPERTS AREN’T anticipating wide-scale bans on carry-on luggage in the wake of the recent British terrorist crack- down, but closer inspections are probably here to stay. Among those predicting tighter pre-boarding security is Edouard Maze-Sencier de Brouville, sen- ior travel security consultant with the Control Risks group. “More iJET Intelligent Risk Systems, cial impact, according to Interna- security means more and better there are also rumblings in the tional SOS regional security di- scanners, more trained personnel security community about possi- rector, Tony Ridley. to man these (and) larger search ble restriction on passengers car- areas, all of which have financial “Airline companies and airports rying electronic devices capable implications for the airport au- have successfully passed on an of transmitting a signal. thorities,” he notes. array of increased costs by the The risk, highlighted by incident addition of line item surcharges According to John Thorn, trans- at Schipol in August, is that a ter- (fuel, taxes, administration, An- portation industry analyst with rorist could transmit a signal to a sett surcharge, security) over the bomb planted in checked lug- past few years. A similar cost re- Inside this issue: gage. covery method is likely to be im- plemented and apportioning the Still an enabler 4 “This situation could end the de- responsibility of the increase to bate over allowing in-flight cell those service elements. The in- Lessons from Lebanon 6 phone use and lead to a perma- convenience is more likely to be nent ban,” he says. Commissions 8 borne by travellers,” he says. Whatever measures are adopted, Harbouring eventsan 10 travellers won’t escape the finan- To page 2 btTBulletin is published by PUBLISHER: Nigel Wardropper EDITOR: Allan Leibowitz BTTB Marketing Pty Ltd nigelw@bttbonline.com editor@bttbonline.com ACN 088 536 903 PO Box 825 Paradise Point Qld 4216 P O Box 389 Kenmore Qld 4069 www.bttbonline.com T: +61 7 5529 3892 F: +61 7 5529 3893 T: +61 7 3374 3792
  2. 2. Page 2 Carry-on confusion From front page “not sustainable in the long term, and have since been altered to Chris McGoey, a director of something close to the previous McGoey Security Consulting, level”. observes that some airports are “reaching the breaking point to “The current size restriction of through-put all the passengers cabin luggage in the UK does not onto a flight in a timely manner”. appear to bring anything in secu- “Many airports are poorly de- rity terms, but is already an im- signed and don’t have the space provement on the all-out ban,” he for staging all the new and ever- says. “The inevitable knee-jerk changing security requirements,” reaction will have to be followed he says. aviation security policy post-9/11 by better security, maybe along has been “to prevent another air- the lines of passenger profiling French security analyst, Alain craft from ever again being used already in place in some coun- Establier, of Airport Security as a weapon of mass destruction”. tries with some high-profile air- Consulting, is even more lines, but this obviously opens a alarmed, believing that “It could be argued that this mis- new, contentious human rights “everything could be transformed sion was accomplished a couple debate on how this profiling is into an explosive item”. This, he of years ago,” he says. However, undertaken, by whom, following says, means that authorities have Mitchell cites cynics who have what criteria, and so on.” to re-examine current detection criticised the billion-dollar ‘front- technology – and, more impor- of-house’ spending spree as The call for passenger profiling is tantly, the skills of security per- “mere window dressing” and un- echoed by Establier who also sonnel, many of whom he be- necessary. wants to see airports investing in lieves are incapable of accurately better scanning technology and reading the scanner images. “The opportunity now is to fi- operators and more rigorous nally get aviation security right, screening of ground staff whom Establier fears the worst when at the policy level, and in the ap- he identifies as the next line of terrorists follow the lead of drug propriate overall context,” says threat. smugglers and begin ingesting Mitchell. However, he notes that explosives. He points out that security is more like a moving “We drew a ‘Maginot Line’ in “99.8% of the airports are today target. “Close one gap and the front of boarding while neglect- unable to detect a piece of Sem- bad guys exploit another. Box ing the back and the sides: cater- tex (plastic explosive) carried (on cutters one day, explosives in ing, ground staff, private security the body)”. shoes the next, shoulder-fired and police forces, connecting rockets, then sports drink con- flights, etc,” he points out, noting Kevin Mitchell, chairman of the tainers.” that criminals are already using Business Travel Coalition, hopes accomplices with airside access. that the recent scare will lead leg- De Brouville points out that the islators to more viable, enduring measures including the ban on If airlines and airport authorities security arrangements. He notes carry-on luggage imposed at the do decide to curb carry-on lug- that the mission of the US federal height of the British scare were gage in the future, this raises
  3. 3. Page 3 a number of challenges for business travellers. line guidelines, minimize carry- on goods such as electrical Take a look (items) and toiletries, allow addi- Frontier Solutions & Strategies tional time for check-in and director Paul Hughes points out monitor news services for any that while the carry-on ban meant in the changes to the security and avia- electronic gadgets such as lap- tion environment,” advises SOS’s tops, MP3 players, mobile phones Ridley. and even cameras were diverted mirror to the hold, typical laptop cases McGoey’s advice is to arrive at or cabin bags offer little protec- the airport early. “Maintain a tion from damage or theft . positive and friendly attitude when dealing with airport secu- and His company distributes a range rity protocols,” he adds. of protective cases which can be used as carry-on or check-in lug- According to Establier, this is a you’ll gage. But the risks aren’t limited good time to compare the secu- to physical damage. “Our per- rity preparedness of various air- sonal data and identity informa- lines – and “choose the company tion on our laptops, PDAs and according to this benchmark”. see mobile phones are also at risk. It’s also important, he says, to However, these can be protected select airports which are able to using encryption, biometric fin- balance the need for security with your gerprint recognition and pass- efficient baggage handling and words so that even if our prized traveller processing. And when electronic gadget does fall into travelling in Europe, he says, the wrong hands, our secrets and consider rail as an alternative. new personal data will not be re- “The current climate is difficult, vealed,” he advises. “And of but corporate travellers still need course, keeping copies of the to go about their work, holding boss. most important information is meetings, striking deals and win- paramount, whether it is a paper ning business,” says Control copy or an electronic copy of Risks’ de Brouville. “It is a good your data files (from your laptop, opportunity for companies to re- PDA, MP3 player or mobile view their incident management phone) which has been saved to a plans, their travel security and portable storage device.” information security policies.” Looking for your travel career While travellers can’t do much to take-off? TravelManagers offer In similar vein, iJET’s Thorn says you the freedom, the flexibility and about the security environment, travellers should increase their the independence you’re looking they can take steps to reduce the situational awareness and work for. See our web site for details. inconvenience of some of the toward becoming more security heightened measures. www.travelmanagers.com.au savvy. “Proper preparation is “Ensure all baggage is within air- key,” he says. TravelManagers
  4. 4. Page 4 Travel still an enabler AMERICAN EXPRESS COM- rate Travel Executives found that tion, business efficiency and the MERCIAL Card vice president nearly 92% of chief financial of- bottom line. David Reimer recently told the ficers plan to spend the same or Talent Retention: Australian Business Travel Asso- more money on travel this year – ciation conference that travel primarily because they are travel- Travel is highly emotive. It takes should be seen as a key part of ling more often, but also due to a lot out of people, yet it still car- the business process. Here is a the higher costs of business ries a degree of prestige. Poor summary of his address: travel. Interestingly, value for handling of travel can affect key money topped the list of travel talent and contribute to dissatis- Our industry, which has often concerns for these finance execu- faction, which ultimately impacts looked at business travel as an tives, and nearly 68% were also business productivity. expense, is starting to treat travel worried about the potential for as a business enabler – an input Today, the battle to retain talent world events to affect the safety that helps a business be more is fierce enough without the of their travellers as employers profitable. added burden of having to man- recognise their duty of care to ensure the health and safety of age travel effectively. Organisations can underestimate their employees. As a result, in the area of safety the value travel creates, such as and security, American Express driving business growth, generat- At American Express, we under- is seeing more interest among ing sales or allowing the transfer stand how insights such as these prospective clients, including of knowledge. can have a massive impact on an mid-sized businesses, in what we A survey conducted earlier this organisation – especially in three offer by way of insurance for year by the Association of Corpo- key areas. These are talent reten- their employees who go on the road. Providing such duty of care is now seen as an integral part of Aberdeen survey results now available a company’s governance pro- A number of BTM readers gramme. recently participated in an Business Efficiency: expense management sur- Another important area of focus vey by AberdeenGroup. for travel is obtaining business In appreciation, the re- efficiencies. searchers have made their The ability to help staff focus on results available online at their core tasks has always been a http://www.aberdeen.com/ feature of successful organisa- tions. link/sponsor.asp?cid=3378 One such example is our Global Get in quick because the link Card Benchmarking tool which will soon be removed. u t i l i s e s d a t a t o help our clients identify and
  5. 5. Page 5 evaluate savings opportunities against peer group comparisons. More than 50% of our largest customers have enrolled, and nearly all are receiving reports via their American Express ac- c o u n t m a n a g e r s . The improved forecast accuracy and budget planning of the tool helps validate travel policy and investment decisions. And it communicates Travel & Enter- tainment programme perform- ance more effectively. The Bottom Line: When it comes to money and the bottom line, ask yourself this As a result, it was no surprise to sations seeing the world as their question: why do people in your find that more than half the CFOs marketplace and ignoring borders organisation travel? The core rea- American Express polled this to transact globally, it is more son for business travel is to get year from our corporate base in important now than ever before people meeting face-to-face with the US indicated they are focus- that we all continue to examine colleagues or with clients. Hav- ing on cost-control. Their priority and demonstrate the relevance of ing your people relaxed and is to get employees behind their any travel investment – be it do- ready to perform is an essential spending rules and build buying mestic or international. product of the travel investment. leverage with airlines, hotels and Yes, business travel is emotive. car rental firms to turn travel into The consequences of poor T&E Yes, it can be contentious. But it a competitive advantage. management can damage your does not have to be a chore or a bottom line. And with more and more organi- financial drain.
  6. 6. Page 6 Lessons from Lebanon By Ira Russ THE RECENT WAR between Israel and Hizballah dominated the world's attention, left hun- dreds of people dead and thou- sands injured, and trapped thou- sands of Arab and Western tour- ists in Lebanon for weeks. But the war’s impact on companies operating in the Middle East was minor compared with its geo- political implications. Companies operating in Leba- non encountered numerous diffi- culties but most were able to ruption to business was minimal. workers were able to perform quickly regroup their personnel Booz Allen also arranged for their duties elsewhere in the and resume operations with only office support personnel to relo- country. minor setbacks. cate from Beirut to other loca- Many manufacturing plants re- Many organisations provide ser- tions in Lebanon where they mained open. US-based Limited vices that can be performed al- could continue to operate nor- Brands closed its office in Car- most anywhere, such as consult- mally. Such a minor setback to miel – a city 15 km from the ing, marketing and publishing. operations was typical for most Lebanon border that was hit by Booz Allen Hamilton, a global companies operating in Leba- more than 100 missiles – but the strategy and technology consult- non, as the flexible workforce company’s factories remained ing firm, evacuated most of its was able to work in other loca- open with only a minor drop in consultants from its Beirut office tions in Lebanon and throughout production reported. Limited within five days of the start of the Middle East. Brands was also able to shift its the war. The war’s impact on operations shipping from Haifa port to Ash- Using information from sources in Israel was also minimal and dod port with no negative re- like Overseas Security Advisory largely confined to areas north sults. Bill Archer, Limited Council (OSAC) and iJET Intel- of Haifa. While many compa- Brands’ global security director, ligent Risk Systems, Ray Tho- nies halted travel to Israel, they says while the Carmiel office mas, senior manager for busi- allowed employees already in closed for 34 days and some of ness assurance, was able to help Israel to stay. the workforce relocated to cen- arrange for the evacuation of tral Israel, he was able to main- Companies with operations in most employees from Beirut to tain contact with employees and northern Israel were forced to other locations in the Middle operations continued normally close their local offices for the East. Thomas says that with help for the most part. Archer lever- duration of the war, but many from other regional offices, dis- aged information from iJET
  7. 7. Page 7 and local sources to ensure still trapped in Lebanon. With Another security director says his company leadership was assistance from the Garlin that the key lesson he learned aware of the actions needed to Group, an international security was the need to develop strong protect employees. consulting firm, the company relationships with security pro- evacuated the family to Amman viders around the world so that The relocation of his associates in 24 hours. In both cases, senior they do not have to start looking to central Israel, however, pre- security managers had to devote for help during a crisis. sented another challenge by ex- significant time and assets to en- posing them to the risk of suicide The war proved to security direc- sure the operation succeeded. bombings - which is not as big a tors the need for reliable traveller concern in the north of the coun- tracking systems, and many try. companies are now asking em- “You cannot move into ployees to include personal The war took place during the Northern summer vacation sea- the business continuity travel to high-risk destinations in their profiles so they can be son while many workers were phase until you have found in case of an emergency. away, which may have lessoned verified that your em- the impact on business opera- As Thomas says, you cannot tions. ployees are safe.” move into the business continu- ity phase until you have verified Many companies, however – that your employees are safe. some without operations in Lebanon – were faced with While the impact of the war on evacuating Lebanese nationals business operations was rela- on vacation in Lebanon. Many of tively minor, the conflict pre- these companies could not im- sented companies with an oppor- mediately locate their employ- tunity to test and update emer- ees, making evacuation more gency plans. difficult as road conditions wors- Both Ray Thomas and Bill ened and border crossings Archer say the crisis served as closed. A major US technology positive reinforcement that em- and manufacturing company ployees were flexible and capa- with operations in the Persian ble of performing well under Gulf region used iJET's Global pressure. Guardian service to evacuate a Lebanese employee and his fam- They also agree that the crisis served as an affirmation that they Ira Russ is regional manager, ily – including a newborn baby. have the right systems and secu- Middle East and Africa, for Days later, the company discov- rity providers in place to handle iJET Intelligent Risk Systems ered that another employee was crises. (www.ijet.com)
  8. 8. Page 8 Commissions and ommissions COMMISSIONS ARE THE other half of the ledger in your TMC fee arrangement. Consultant Tony O’Connor argues that the difference between a good deal and a bad deal can be several percent of your entire travel spend. They deserve more at- tention. Down But Not Out The main thing we hear about commissions these days is that they are falling. The word ‘zero’ is sometimes heard, as in the “zero airline commis- sion environment” that is meant to prevail in New you have lost control of their fees, and you have Zealand. (It doesn’t.) Yes. Commissions, money lost control of their interests. paid by suppliers to travel agents in return for blocks of travellers’ business, are falling as suppli- Leakage ers are more able to compete for business directly. But they are still a long way from zero. There are two types of commission: those that the TMC receives, and those it does not. TMCs do not The commissions that have fallen most, and most receive all the commissions generated by all book- publicly, are the base commissions; those paid by ings. Non-recovery is higher among hotels, where suppliers equally to all agents. In some cases these collection rates from small, remote and offshore are now zero. But over-rides and various other pay- properties are lower. Overall hotel commission re- ments, while falling, are still mostly at significant covery rates from hotels vary from 70% to 90%. levels. There is also leakage with some airlines. Back when all commission revenue was indisputably the Why They Should Be Yours property of the TMC, TMCs naturally made sub- stantial efforts to maximise the recovery. Now that The very spirit and purpose of a fee-for-service ar- much of the commission revenue is claimable by rangement with a TMC is that you should receive the buyer, the buyer needs to ensure that recovery all the commission generated by your bookings. efforts are energetic. That is why fee arrangements replaced rebate deals, so that you could see and measure exactly Not all commission revenue received by TMCs is what you are paying, and so that the TMC is no passed onto the client. Your contract might specifi- longer paid by and beholden to suppliers. Hybrid cally exclude certain commission types. deals, whereby the TMC charges lower fees but (Unfortunate.) More likely, not all commission retains some commissions, are still unacceptable types are specified as payable. If some but not all from a buyer’s viewpoint. If a TMC receives any commission types are specified in the contract, of the commissions generated by your bookings, those not specified might not be claimable. Also,
  9. 9. Page 9 Domestically, what supplier payments do you re- there can be ambiguity about what is a “commission”. The term is actually becoming a bit ceive from Virgin Blue and Jetstar? What about in- of an anachronism. Supplier payments have differ- centive payments? Do you purchase insurance? Ex- ent names. You should therefore claim “supplier actly which and what amount of commissions were payments”. Make sure your contract has tight word- not recovered? Why? ing that is not open to interpretation. Qantas Flying Blind It is important to note that Qantas commissions are Most travel buyers receive a monthly lump-sum less problematic. For corporate clients with a Qan- commission payment. Many receive some sort of tas deal, Qantas bundles up all the commissions and breakdown as to how the figure was derived. But I delivers them directly to the buyer as a point-of-sale have never seen a breakdown that I regard as ade- discount. quate. Which commission types, on which airlines, A More Transparent Future on what routes and fare types, at what levels, ap- plied to what base spends, generated in which Any commissions that might be retained offset fees month? What amounts are carried over? Ditto for charged. And so to receive more commissions could hotels and cars. Yes, it is detailed. But without such result in an increase in fees. But at least then you detail you are acting on faith, which is not good would have a clear, measurable and assessable fi- supplier management. If you are paying fees, you nancial position. Discussion of this issue is difficult have the right to precise commission reporting. since it can be taken as criticism of suppliers. It is not. It is an attempt to promote more transparent Holes in the Bucket and assessable financial arrangements. The best ar- rangement is one in which all commissions gener- We cannot detail all the commission types and lev- ated are accurately reported in sufficient detail. els in an article. There are too many, and there are Those that you receive are good revenue that offset confidentiality considerations. But to illustrate the fees. Those that are retained are counted as part of situation, let’s consider some of the less explored the effective fee. Simple. items. When you fly to Houston or Helsinki, you might use two or three airlines. These inter-line car- •Tony O’Connor is principal of Butler Caroye, a riers also generate commissions. And when it is a leading independent management consultancy codeshare flight, what commission is applied? specialising in corporate travel in the Asia Pacific. Up in the air? Read about all the airline issues in the next edition of Business Travel Monthly, out next month. And if you’re not a subscriber, make sure you get your copy by visiting www.bttbonline.com
  10. 10. Page 10 Harbouring events ambitions THE SYDNEY HARBOUR Marriott Hotel has launched a unique events solution which should prove popular with direct corporate business as well as pro- fessional conference organisers. Realising its own in-house con- ference limitations, the 550-room hotel has linked up with two large nearby venues, the Crystal Palace at Luna Park and the Museum of Contemporary Art for a one-stop events solution dubbed Quay Events by Marriott. According to Angus Pitkethley, the property’s marketing director, adds. “So the single touch point happy to handle all the initial de- “the challenge we faced was that is Quay Events by Marriott, posits. we have a large number of guest through the Sydney Harbour Pitkethley says most meetings rooms, but only enough meeting Marriott.” professionals are familiar with space for up to 180 people”. The Quay Events team will also the facilities in the area, so the In the past, the Circular Quay co-ordinate the negotiations with concept will be more valuable to property had to refer larger events the venues and take the process direct corporate clients. on to rival hotels, but it decided through to contract stage. He identifies pharmaceutical to look for strategic partnerships Clients sign individual contracts companies and car companies with its neighbouring events ven- with each venue and a single con- who do big events as ideal clients ues. tact person is named at each for the concept, and has already For clients, one of the key bene- venue to manage the event. knocked off one event for Astra- fits of the Quay Events concept is Zeneca. Besides liaising with venues, the the single point of contact with QE team can also manage logis- The Quay Events concept has not Marriott. tics and even transfers between been tried anywhere else in the Pitkethley explains that the Mar- the venues. group, and other properties are riott events booking centre fields watching with interest. At its industry launch, a group enquiries and then co-ordinates was taken from the hotel to Luna Pitkethley says there is also scope with either or both of its partner Park and on to the MCA by char- to bring on additional partners in venues on the client’s behalf. ter yacht. the Circular Quay area to “add “We’ll get the rate, space and depth”. Billing, at this stage, is handled technical information and prepare individually by each venue al- “But we’re going to walk first the proposal for the client,” he though the Marriott team is before we run,” he says.