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KEVORK DJANSEZIAN / Associated Press
By early 1997, Southwest Airlines wound up being the only carrier willing to deal with Business Travel Contractors Corp., the consortium that Kevin P. Mitchell founded.
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Winging It: One of the most influential voices in air travel - Kevin P. Mitchell

Since the mid-1990s, one name - Kevin P. Mitchell - has probably appeared more than any other in my news stories and columns about business travel.

Here's why: Mitchell, usually identified as chairman of the Radnor-based Business Travel Coalition, is the most knowledgeable independent voice I know representing the interests of the companies that he calls "the airlines' best customers."

Fifteen years after Mitchell started working as an advocate for business travelers, I still never delete one of his e-mails without reading it.

A Philadelphia native, Mitchell was a rising corporate star in the early '90s, the vice president of human resources and services for Cigna Corp. Part of his job at the insurance company was overseeing purchasing of airline tickets, and he became increasingly dismayed at what he saw.

Cigna was spending $5 million a year with a large local travel agency to arrange for airline tickets with USAir (now US Airways) between Philadelphia, the insurer's headquarters, and Hartford, Conn., where it has major operations. The company was spending millions more on all its air travel.

The travel agency was collecting a 10 percent commission and a bonus, or "override," of 9 percent from USAir to issue Cigna's tickets, which were relatively expensive, given that the airline had no competition on the route, Mitchell recalled.

Compensation of that magnitude was not unusual for corporate travel agencies at the time, and the agencies often rebated some of their commissions to Cigna and other clients. But Mitchell didn't think it was a smart or efficient way to pay for work that was essentially clerical.

He also thought the major carriers' fare structures were needlessly complex and confusing, with dozens of prices available on each airline for the same seat on the same flight. Why, he wondered, couldn't companies just buy tickets in bulk and pay simplified "net fares," meaning without commissions and overrides.

Mitchell resigned his job in 1994 and, with the backing of Cigna and 16 other large companies, set up a consortium, the Business Travel Contractors Corp., or BTCC. Its aim was to negotiate with airlines for a small, easy-to-understand number of net fares on heavily traveled routes. Travel agents would continue to issue the tickets, for a fee, and provide other services.

BTCC obtained approval from U.S. Justice Department antitrust regulators for the members of the consortium to negotiate jointly with airlines.

But by early 1997, after Southwest Airlines wound up being the only carrier willing to deal with the consortium, BTCC was out of business.

In part because of the pressure Mitchell applied, airlines in the mid-1990s began to eliminate commissions. Over time, that essentially gave corporate customers net fares and forced the travel agencies to charge service fees. Since 1994, the economy had strengthened, too, allowing airlines to raise fares and give business travelers little choice about paying them.

Mitchell was undaunted by the consortium's failure. After a few anxious months with no income, he had gathered enough support from companies that had been in the consortium and others to launch the Business Travel Coalition (www.businesstravelcoalition.com) as an advocacy group.

For the next few years, he became a frequent visitor to Washington, where he consulted with members of Congress and senior Transportation Department officials, educating them on how the major airlines used their market power to keep fares high.

Using numerous position papers, some delivered as testimony at congressional hearings, Mitchell helped people understand how some big airlines were using predatory pricing - selling below cost - to drive new, small, low-fare airlines off new routes.

Many travel-industry and government officials credit Mitchell with raising awareness of airline-pricing practices, which helped give low-cost carriers, including Southwest, AirTran, and others, the breathing room in their early days to become major airlines.

"Predatory pricing was probably the single most important issue Kevin took up," Peter Buchheit, the retired travel manager at Black & Decker Corp., an original BTCC member, told me recently. "He could go through a litany of reasons it was wrong. He helped us understand why airfares were so high. There was a lot of resistance in the early days by our travelers to using low-cost carriers."

Since those days, Mitchell has taken up, and expressed well-researched opinions on, dozens of other big travel issues in the United States and Europe, including airline mergers, security, overseas route applications, fuel costs, airline maintenance, and control of travel-reservations computer systems.

An early adopter of Internet technology, Mitchell today publishes on the Web a daily roundup of air- and business-travel news called Travelogue, and he maintains an e-mail list of more than 35,000 people in more than 80 countries who want his analysis on travel issues. He also helps journalists understand the issues.

Knowing Mitchell has that kind of following prompts me to always pick up the phone when I need help, speaking to him in what he calls the Business Travel Coalition's "world headquarters."

Actually, that is a spare room in his home in Radnor, where his wife, whom he always refers to as "Saint Linda," has been his only assistant for more than a decade.

My fervent hope is that I can retire before Kevin does. I really don't want to do this job without him.

 


Contact Tom Belden at 215-854-2454 or tbelden@phillynews.com.

I will be on vacation next week. My next column will be published July 20.

 

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