Ta-ta, BTCC

By | July 11th, 1996

The Business Travel Contractors Corporation is dead.

Only one airline – Southwest – has signed on to the proposal. Many of the consultants who once stepped forward to endorse the concept have now quietly backed away from it, and there’s a pervasive feeling in the industry that BTCC’s time has come and gone.

But before we bid its controversial founder Kevin Mitchell adieu, a few words. A eulogy, if you will.

Kevin Mitchell was a great man. When he arrived on the scene in 1994, I didn’t think so, and a lot of people agreed with me. His proposal to strip airline tickets of frequent flier miles, overrides, and commissions shocked the industry and outraged travel agents.

But net fares made sense then, despite BTCC’s clumsy introduction at the 1994 National Business Travel Association convention in Los Angeles, and despite a dubious strategy to attract customers that hinged on a court decision and the generosity of airlines.

In particular, the doomed idea breathed life into the fledgling interactive travel industry with a promise to dismantle a corrupt distribution system. It opened countless opportunities for the travel entrepreneurs of today.

Net fares make sense today, too. Quite a few corporate travel departments have discreetly begun using the “commissionless” concept, albeit under a different name, to secure cheaper tickets with airlines. They’re saving the $140,000 management fee that BTCC charged but capitalizing on an idea championed by Mitchell. And airlines are sidestepping the exorbitant commissions they once paid to agents.

No, BTCC wasn’t first at net fares. Before Mitchell, there was Alan Kawadler of the Business Travel Buying Group and a half-baked IBM scheme to forfeit frequent flier points. But Mitchell is widely credited with popularizing the idea in the travel industry.

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In a way, I find it sad that BTCC failed. Mitchell gave the idea all he could. So unnerving was the wait-and-see for the Justice Department to rule on BTCC’s antitrust status that it literally drove Mitchell to the brink. Two years ago he was bedridden with double pneumonia while the department deliberated. Now that’s personal sacrifice if I’ve ever seen it.

Blame market forces, not a faulty business plan, for doing BTCC in. When Mitchell leaked details of his plan to USA Today and Business Travel News in mid-1994, the airline industry was in a tailspin. Executives on both sides of the buy-sell equation were looking for a way to cut costs. If carriers had continued to hemorrhage money, Mitchell’s idea might have worked. Then the airlines rebounded, slamming BTCC’s window of opportunity shut.

In an editorial I wrote for one of the travel trades more than two years ago, I compared BTCC to Hillary Clinton’s ambitious health care reform proposal. Both were poorly executed proposals that lacked public support. In retrospect, I think the analogy is even stronger today, because in the end, not all of the First Lady’s efforts were in vain. Consider the subtle changes in coverage laws that make buying and keeping health insurance easier, due in no small part to Mrs. Clinton’s arrogant first effort at reform.

In remembering Mitchell’s BTCC, it’s important to understand that all of us in interactive travel owe a great deal to the man and the idea. He fought the battles that few of us dared to fight. He stood against a corrupt distribution system that fostered incompetence and greed. And his idea, despite its imminent failure, made it easier for us to market and distribute a brand of interactive travel that is freed from the shackles of the ineffective travel agents who stood in the way of progress for so long.

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