One of the travel industry's key demands when dealing with regulators and governments is for "a level playing field".
Tour operators moan about scheduled airlines not having to pay for consumer protection; European airlines moan about their US rivals ability to use Chapter 11 when it all gets too much; the interminable GDS deregulation debate is all about maintaining the level playing field; it's why the OFT wants transparent pricing.
So there must have been some raised eyebrows and furrowed brows when Management.Travel reported that "the US Department of Treasury this month plans to infuse American Express with $3.39 billion of new capital as part of the $700 billion financial bailout program".
The bailout also covers American Express Business Travel - the largest travel management company in the world. It has nearly 12,000 clients who spend more than $26bn on travel and related services. Its online solution, AXIOM, has access to 137,000 suppliers
At the risk of simplifying an 86-page 8-K Filing, is this the first travel company bailout of the current slowdown?
Clearly, Amex isn't going to spend $3bn-plus on an SEO budget for its social networking sites, but there are lots of its suppliers around the globe - digital agencies and advisers as well as product suppliers - who will sleep a little easier knowing the company is now effectively government-backed. Amadeus, Galileo and Sabre will also be pleased.
Which is all well and good for the above, but what about the other business travel agents out there who are having to struggle on with a helping hand? It must be particularly galling for Expedia Inc; it has been carefully building up its stand-alone travel management company Egencia to the point where it is the fifth largest business travel agent in the world.
The announcement is unlikely to knock Egencia off course, but when the market leader in any sector gets a boost, it's tough on its rivals. Particularly when that boost comes via a funding injection in a market where funding injections are hard to come by.
Good call Martin C. The bail out might leave CWT et al smarting a little.
Not sure this bail-out had anything to do with business travel. As the largest credit card issuer to businesses and consumers in the US, Amex's willingness to extend credit will have a significant impact on the US economy - the pertinent line in the management.travel article is "The company in recent months has reduced or eliminated lines of credit as it noticed a rise in delinquencies and defaults."
Does raise an interesting point about all the bail-outs giving companies in the banking sector who have divisions operating outside of the banking sector an unfair competitive advantage.
AMEX the business as a whole has received this cash, so its utter speculation that it will be placed in any particular section - if the gov did a good job they will insist it is spent on the important finance bits. This is not a story - just useless speculation that means nothing