What I have learned the last 6 years running and working with large Regional TMC’s Presentation to CBTG By Chris Dane Baltimore, MD April 25,2012 1

Last 6 years I have: Developed and implemented the HRG Affiliate Program Lead the integration of what was a large regional TMC into HRG (ETA/HRG DC) Implemented numerous accounts globally for both the affiliates and a ETA/HRG. Discovered “inappropriate ticketing practices” in DC and worked with the suppliers involved to correct and at the same time put in place appropriate agreements with those suppliers with the major accounts affected. 2

Last 6 years I have: Worked (in the background) with Business Travel Coalition (Kevin Mitchell) on some of their initiatives. Consulted with numerous investment bankers on the overall travel industry including leisure and suppliers. Currently doing a consulting project for Hickory from the next couple of months. 3

So What Did I Learn??? 4

I learned: Strategy: What business am I in? More than just a leisure or corporate decision SME, High touch corporate, large managed travel What industries do you excel? (E.G. Law Firms, media companies etc.) Under million over million in air sales. How do I build and maintain client relationships? What am I doing to innovate vs. replicate? What are my strengths, weaknesses, opportunities or threats. How do I Manage each. 5

I Learned: In operations: The debate is over in terms of Centralized Ticketing or not. Centralized ticketing all the time…even with auto- ticketing. BA’s net ticketing program converted me. Had to train 70 agents and 27 IC’s Found many commission opportunities missed. Agents can take more calls…and that is what the client wants. Biggest Complaint from clients was being put on hold or no one answering and thus going to VM. 6

Operations continued: Today the market is good for experience agents at a reasonable price. Longer term is a problem. With the right phone system home based agents are as productive as office based agents. Establish metrics so the agents can measure themselves. Ours was: “Net” tickets issued within the team Mistakes made DM’s (before centralized ticketing). Waiver and favor documentation. Complaints – no more than 1. 7

I Learned about: Business Management BM’s are the key to dealing with clients and client retention. Clients want quarterly/semi annual business reviews (depending on size) that includes: The travel usual data that the client wants to see. Bench-marking data to compare performance. Your view of what is going on in the industry. Waiver and favor data. Service Level performance data and plans to resolve any open items. Speed to answering the phones 8

I learned about: Business Management continued: Abandoned calls. Complaint ratios Avoid/Minimize “Scope Creep” unless you are paid to do it. Run a P and L on the account so you know the value of the account. 9

I Learned about: Sales Have a (small) separate sales force to build a pipeline. Don’t bid on every piece of business Must have a compelling reason to bid. Did not like to bid via online bid sites Only interest is price and is a “race to the bottom.” You have a cost advantage over the mega’s. If it adds value to the client…charge for it! After hours calls Special programming Credit card reconciliation Should consider joining a global network if not already a member. 10

I learned about: Technology We are not a technology company we are a service company Buy it – don’t build it Little differentiation in technology products. Key is the ability to consolidate data from around the globe. A “state of the art” phone system is critical. 11

I learned about: Suppliers Very helpful on client service issues but hard and very slow to get them to change the mind. Examples: 1.British Airways Net ticketing program. (slow) 2.AA’s Direct Connect strategy. (never did) The local representatives can generally be trusted as a rule. But do gossip too much. 12

13 Comments on American Airlines: A company that I do not recognize and that has “lost it’s way” trying to avoid bankruptcy….which was inevitable. Case in point-Direct Connect and why the strategy remains flawed. Got the distribution channel nervous and the lost share and revenue. Virtually no support from competitors. GDS contracts were no longer co-terminus. It is aimed at their best, highest yielding and most loyal customers….and not the unmanaged travelers, price sensitive least loyal clients…in a word…dumb.

14 AA – US or AA - DL Merger: AA – DL Merger would not make it past US/EU anti-trust concerns. AA – US Merger Believe US/EU would approve. But not totally certain it will happen Believe the name would remain AA Would remain in “One World” Key senior management would be mostly US a’ la Delta is NW and UA is CO management.

15 AA merger continued: There will continue to be major union problems with the combined carrier AW/US never combined unions from the original merger. Essentially run 2 separate airlines due to the different work rules. AA union only complicate that mess….but it is not impossible to “get the deal done”

16 Thank you for including me and it is nice to visit with many old friends!