Skift Travel News Blog

American Express Global Business Travel has partnered with Emirates Group-owned dnata to offer its global clients more local expertise in the Middle East region.

The agency has signed a “preferred travel partner agreement” with Dubai-based dnata Travel Management. It will provide full end-to-end travel and meetings management services to Amex GBT’s customers, the company said.

Dnata Travel Management is part of the dnata Travel Group, which is the travel division of dnata, a global air and travel services provider. Amex GBT, and other travel agencies, often establish these types of partnerships with “local travel partners” in countries where they do not have a proprietary operation.

The pair also have some history, as dnata acquired a 23 percent stake in corporate travel agency Hogg Robinson Group in 2008, which was bought by Amex GBT a decade later. Alongside investment firm Boron it was a significant minority shareholder at the time.

The tie-up comes as the Middle East embarks on a number of large scale projects, including Saudi Arabia’s Neom project. The country is eying a 100 million-visitor target per year by 2030. “Saudi has huge ambitions,” the tourism authority’s chief technology officer Choon Yang Quek said during Skift Global Forum earlier this year.

“We look forward to working with Amex GBT and its clients as the region sees strong growth in corporate travel, fuelled by mega-projects and companies that are seeking to expand,” said Rashid Al Awadhi, senior vice president – dnata Travel Group, Middle East and India.

Adnan Kazim, chief commercial officer at Emirates Airline, will be speaking at Skift Global Forum East in Dubai, which takes place December 13-15.

Expedia Group appointed board member Julie Whalen as the company’s new chief financial officer, replacing Eric Hart, effective September 26.

Whalen, the first female leader at this level at the company, will lead Expedia Group’s global finance organization, and will have a high-profile position, helping to explain the company’s performance during earnings call and conferences. She will remain on the Expedia board as a non-independent member.

Hart, who has been with Expedia Group for more than 13 years, and the company’s chief financial officer since 2019, will stay on for a brief transition period until October 1, and will remain on the supervisory board of Trivago, an Expedia Group brand, as well as on the board of the Global Business Travel Group, where Expedia is an investor.

Expedia Group said Hart will “pursue new opportunities.”

“Mr. Hart’s separation did not result from any disagreement with the Company on any matter relating to the Company’s or Expedia’s operations, policies or practices, including accounting principles and practices,” Expedia Group stated in a financial filing.

Whalen has been chief financial officer of Williams-Sonoma since 2012. Her estimated total compensation, as announced in 2021, was nearly $6 million.

“Ms. Whalen also has been a key proponent of driving the company’s ESG- [Environmental, Social and Governance] related priorities,” Williams-Sonoma said in a financial filing in April.

Whalen was a member of the Expedia Group board’s audit committee since June 2019, and has chaired the committee since 2020.

Hart also had the Expedia Group title chief strategy officer. Whalen does not have that official role.

American Express Global Business Travel, Shell and Accenture have teamed up to launch Avelia, a so-called book-and-claim platform designed to help businesses buy sustainable aviation fuel.

The book and claim model allows companies to pay for the fuel, and claim the benefits, even if it’s not available at their departure airport. The fuel is instead fed into another aircraft in an airport where available.

The goal is to drive down the costs of a fuel that’s between two and eight times dearer than conventional jet fuel.

“Once book-and-claim is approved by industry bodies as an acceptable form of emissions reduction, Avelia could enable airlines and companies who choose sustainable aviation fuel to authenticate, record and report the associated emissions reduction benefits of the fuel towards their voluntary environmental, social, and corporate governance reporting, regardless of where in the world the fuel is used to fuel a flight,” the company said.

The model is also used when purchasing “green electricity” and has been described as one of the most suitable solutions by the European Union. “It balances the fuel’s technical potential, the administrative burden for the aviation industry and fundamental EU Emissions Trading System requirements, like fraud protection,” according to one study.

Drop in the Ocean

The road to decarbonizing business trips is a long one, however. It’s still hard to tell if there’s any meaningful impact. The fuel is still very expensive, and as a pilot program, Avelia will initially offer one million gallons of the fuel, which it claimed was enough to power almost 15,000 individual business traveler flights from London-to-New York.

Overall this pilot wants to demonstrate the credibility of the book-and-claim model. Avelia was developed by Shell and Accenture, with the support of the Energy Web Foundation, but wants to tap into the buying power of Amex GBT’s 19,000 customers.

Will they pay the premium?

“Sustainable aviation fuel is a key enabler of decarbonisation in the aviation industry, and it’s available today. However, it’s currently scarce and costs more than conventional jet fuel,” said Jan Toschka, president of Shell Aviation. “Avelia will help trigger demand for sustainable aviation fuel at scale, providing confidence to suppliers like us to further increase investment in production, and in turn helping to lower the price point for these fuels.”

Amex GBT recently formed an alliance with Shell to help increase the supply of sustainable aviation fuel.

Shell has committed to purchasing the environmental attributes equivalent to 100,000 gallons of the fuel over the pilot phase. It said it would increase that as soon as more of the fuel is available, as it wants to abate 45 percent of its corporate travel emissions through sustainable aviation fuel by 2030.

Sustainable aviation fuel can be made from plant or animal material, and can reduce lifecycle emissions by up to 80 percent compared to conventional jet fuel

“We’re calling on all companies to join us and share the costs and benefits of sustainable aviation fuel across the travel and aviation sectors,” said Paul Abbott, CEO of Amex GBT.

United Airlines and United Airlines Ventures last week announced they were buying at least 300 million gallons of sustainable aviation fuel from utilization company Dimensional Energy over a period of 20 years. United aims to be a “100 percent green net zero” by 2050, without the use of traditional carbon offsets.

On Sunday, Qantas Airways and Airbus said they would invest up to $200 million to accelerate the development of a sustainable aviation fuels industry in Australia to help meet the airline’s goal of lowering carbon emissions.

A smooth, steady start for American Express Global Business Travel during its stock market debut.

The world’s largest corporate travel agency listed on the New York Stock Exchange on Tuesday, under the ticket symbol GBTG, following a business combination deal with Apollo Strategic Growth Capital. The parties initially announced the combination on December 3, 2021.

Shares opened at $7.55 on its first day as a public company. They closed higher at $8.37 after its first day trading on Tuesday.

“We have a significant growth opportunity ahead of us,” said CEO Paul Abbott in a LinkedIn post Tuesday. “As a public company, we have the flexibility to realise Amex GBT’s full potential.”

It was only on May 27, the Friday before the Memorial weekend, that Amex GBT announced it would begin trading on Tuesday. That followed Apollo Strategic Growth Capital shareholders voting to approve its combination with Amex GBT days earlier, on May 25.

As part of its go-public merger, Amex GBT received $335 million from a PIPE, or private investment in public equity, deal with new investors including Zoom, Sabre and private equity group Ares Management.

They join existing backers American Express, Expedia and Certares. Only 15 percent of the company’s stock is expected to be owned by public shareholders.

Investors will be betting on the recovery of corporate travel, which despite rising air fares seems to be on track to exceed spending last seen in 2019 by the end of the year. In April, Amex GBT execs sought to assure investors that the pandemic was just a blip for corporate travel.

They may have just pulled it off.

“For far too long the darlings of travel, like Booking.com and Expedia, have been the focus. With Amex GBT using their SPAC to go public, it now brings corporate travel as a sector and a place to work to the forefront of people’s minds,” said Gavin Smith, director of Element Travel Technology. “It might even help bring those who left, back to the sector. Corporate travel now sits where it should always have done, side by side with leisure.”

However, one investor who wished to remain anonymous told Skift: “We ended up deciding to not participate since the valuation relative to some of the other things we are seeing in the market wasn’t as compelling. It’s a good business with nice tailwinds, it’s just there are more interesting things to be invested in right now.”

It’s a holiday weekend in the U.S. so what better time to break up the monotony of barbecues and beach, and burrow into a Securities and Exchange Commission filing about the pending SPAC debut Tuesday of American Express Global Business Travel.

Among the takeaways:

• The merger of Apollo Strategic Growth Capital and Amex GBT will see Amex GBT’s existing investors, including American Express, Certares, and Expedia Group, among others, controlling 74 percent of the voting power. They’ll have the power to make all of the big decisions, including board of director composition.
• Global Business Travel Group, as the company will be formally called, will be considered to be controlled by American Express Co., and will be regulated by the U.S. Federal Reserve. As Skift previously reported, Global Business Travel Group can continue doing business as American Express Global Business Travel because of an 11-year trademark pact.
• Only 15 percent of the company’s stock is expected to be owned by public shareholders.
• Egencia, which Amex GBT acquired from Expedia Group in November 2021, did $8.4 billion in transactions in pre-pandemic 2019. Expedia Group traditionally disclosed revenue for its corporate segment, but not total transaction value for Egencia. That $8.4 billion would have amounted to roughly 8 percent of Expedia Group’s gross bookings that year.
• The Egencia business was therefore a significant volumes chunk of Expedia Group, which sold Egencia during a huge business travel downturn in a drive to simplify Expedia’s overall operation. At any rate, Expedia Group got a 13 percent stake in Amex GBT because of the deal.
• Ovation Travel, which Amex GBT acquired in January 2021, was tiny compared with Egencia in total transaction value, $1.2 billion for Ovation versus $8.4 billion for Egencia.
• Amex GBT CEO Paul Abbott had 2021 total compensation of $18.4 million compared with $5 million a year earlier.

Tuesday’s stock market coming out party for Amex GBT, trading under the stock symbol GBTG, should be an interesting one to watch in terms of investor confidence in the future of managed business travel.

The world’s biggest corporate travel agency has seen record growth in its customers spending.

In line with (most) other travel industry earnings results, American Express Global Business Travel has seen a significant bounce back over the past few months.

The agency reported a 454 percent increase in total transaction value for this year’s, compared to the same quarter in 2021.

Posting its first-quarter results on Tuesday, it reported transactions of $4.15 billion for the three months ended March 31, compared with $749 million in the prior year’s quarter.

Revenue for the quarter increased 179 percent to $350 million, but it made a net loss of $91 million, a slight improvement on the $114 million loss for the same period in 2021.

As a result of the improved transaction recovery, Amex GBT raised its full-year 2022 revenue guidance by $250 million to $1.75 billion.

Transaction recovery in the last three weeks of April 20224 reached 72 percent of 2019 pro forma, increased 11 points versus the last week of March 2022, the company said.

“We believe we have reached a pivotal moment in the business travel recovery,” said CEO Paul Abbott.

The agency plans to go public later this year by merging with an Apollo Management-backed blank check company.