September 25, 2002, Washington, D.C. - Hal F. Rosenbluth, Chairman and CEO
of Rosenbluth International, the world`s third largest travel management
company, will testify today at a hearing of the United States Senate
Committee on Commerce, Science and Transportation. Rosenbluth`s testimony
will focus on the impact the tragedies of September 11, 2001 had on the
travel and tourism industries. Additionally, Mr. Rosenbluth will put
forward a tripartite part plan to reinvigorate and revitalize the business
travel industry. The plan will address the need for airlines to reform
their fare structure, as well as changes that should be incorporated by
corporate customers and the travel management industry itself.
Since September 11th, the travel industry has faced a consistent onslaught
of bad news. In the past year alone:
a.. Nearly 13 percent of all travel agencies have closed
b.. Total airline sales have decreased by more than $9 billion, or 17
percent
c.. In August 2002, 104 travel agencies defaulted on their payments to
airlines for tickets issued on their behalf, nearly twice that from August
2001.
“While September 11 sent shock waves through the travel industry, the
problems that beset travel began long before the horrors of that day. What
September 11th did to the industry is accelerate the day of reckoning, and
this is now forcing all of us - airlines, corporations and travel companies
- to reevaluate the basic structure of how we do business,” said
Rosenbluth.

In an effort to address the underlying systemic flaws that beset the travel
industry, Mr. Rosenbluth has written a white paper titled A Fare Plan For
Airline Recovery (http://www.rosenbluth.com/flash/Fare_Recovery.pdf),
which lays out some very simple but challenging steps to help the embattled
airline industry restructure in a way that will help generate new revenue
and bring the major carriers back to profitability.
“In a word, the corporate pricing structure of the airlines is broken.
Airlines won`t publicly state that they are in a mess they can`t get out
of, but privately they are quick to agree that lemming pricing has ruled
the day for the past two years. Yet, in fear of losing market share,
carriers have continued to match discount deals on some programs that are
mathematically impossible for corporations to deliver - an irrational
business behavior,” said Rosenbluth. “If airlines, corporations and travel
management agencies don`t come to their senses, the entire airline industry
could crumble under its own weight.”

In the white paper, Rosenbluth also reiterates the company`s stand on
encouraging the airlines to complete the process of improving and
rationalizing their distribution model. This process began earlier this
year with the elimination of agency commissions, and Rosenbluth suggests
the airlines follow this up by instituting a transaction fee for every
ticket that they distribute directly.
About Rosenbluth International
Rosenbluth International, headquartered in Philadelphia, Pa., is one of the
largest privately held companies in the world. Rosenbluth International
provides comprehensive corporate travel management services worldwide. With
annual sales in excess of 5 billion USD and over 4,700 associates,
Rosenbluth International operates in 56 countries. Founded in 1892 and
recognized as a leader in integrated information management, Rosenbluth
International continues to develop innovative business applications and
integrated systems which enable it to provide highly personalized service
to its clients. The travel management company has also been ranked among
FORTUNE Magazine`s 100 Best Companies to Work for in America. Visit us at
http://www.rosenbluth.com.
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