02 September 2009 - Major travel distribution companies are working to incorporate mechanisms into travel reservations that would enable travelers to make donations to help treat deadly diseases ravaging the developing world. Amadeus, Sabre and Travelport have committed themselves to the project, expected to launch in early 2010.
Spearheaded by the Millennium Foundation for Innovative Finance for Health, the effort is part of a larger initiative to collect funds via airline ticket purchases. That program is organized by Unitaid, a World Health Organization-hosted group working to achieve the United Nations' development goals, and specifically focused on lowering the cost of and improving access to drugs used to fight HIV/AIDS, malaria and tuberculosis.
"One of the most important things that has happened in the past few years was actually made possible by travel," said former U.S. president Bill Clinton, speaking in San Diego last week at a National Business Travel Association convention.
Unitaid's Two-Pronged Approach
Representing Unitaid's primary funding source, the first component of its strategy is a "solidarity levy" based on an airline ticket tax. First introduced by France in July 2006, it now is applied in eight countries and has collected "over US$600 million in less than two years" with "no economic distortion for the air industry," according to a Unitaid presentation during a January 2009 WHO meeting in Geneva.
The second component, now in development, is a "voluntary solidarity contribution," and its aim is to "raise funds from individuals and corporations who purchase airline tickets in travel agencies or online," according to Unitaid president Philippe Douste-Blazy in a 2008 report issued by the Global Campaign for the Health Millennium Development Goals. "A single, low contribution of two euros, dollars or pounds per ticket would be simple, voluntary and hassle free. This mechanism uses Internet technology to enable the citizens of the world to contribute directly to a better world. Preliminary assessments by McKinsey suggest that by 2011 the voluntary solidarity contribution could be raising US$1 billion per year."
According to Clinton, "Amadeus developed the technology behind this project and is teaming up with Travelport and its CEO Gordon Wilson, reaching out to other competitors to ask all booking systems to allow people that travel just the option to do what they do in France when they get on an airplane. If everybody who takes an international flight gave $1 or $2 on every ticket voluntarily into a fund, and they knew 100 percent of this money went to save lives of people who otherwise could not afford medicine, what a difference we could make."
Amadeus isn't providing too many details publicly. "This solution will make it easy for everyone who travels to make a micro-contribution (US$2 or €2, for example) through a simple click each time they book their reservation, whether online or through a travel agent," according to an Amadeus spokeswoman. "The micro-contribution will be processed through the passenger name record of every traveler who wants to make a donation as part of any or every travel purchase. Amadeus is proud to have been involved in the development of the technology behind the project from the very beginning, ensuring that the innovative financing solution can be integrated into all GDSs."
The January Unitaid presentation referred to a "fully integrated" Amadeus solution, with "implementation first in travel agent/e-broker [sales] but extendable to airline/LCC direct sales." Passenger contributions--to be made at the time of airline ticketing--would be processed only via credit cards through "payment service providers, e.g., Bibit, Cybersource and others." The presentation also noted the potential for pilot programs in Australia and Italy as early as "April 2009," but the Amadeus spokeswoman did not clarify whether those tests were underway. She did say that more details would be available "in the coming weeks."
According to a 16 June report from the Leading Group on Innovative Financing for Development--a body that includes 55 member countries and various U.N.-related agencies and other nongovernmental organizations--the launch of the operational framework "is scheduled for September 2009 at the United Nations."
The International Heath Partnership in a 2 August posting to its Web site regarding the Millennium Foundation effort wrote that involvement by Amadeus "has led to commitments from Travelport/Galileo and Sabre to implement the solution. All three GDS partners have now integrated the donation engine into their front office. Close partnerships with the GDS companies will enable the Millennium Foundation to build an alliance around the project across the whole travel industry, especially for travel agents, airlines and hotel chains. Since the movement is based on new technology, online networks will be a key element of mobilizing people, motivating them to contribute and to participate in the movement in a number of ways that will be based on online tools. Technically, payments would be collected based on the partner's IT architecture. Discussions with legal experts have so far revealed no major legal or regulatory barriers. Complete rollout is expected to take three years from launch."
Unitaid added that participation by the three major GDSs could allow the program to "technically reach 100 percent of the indirect volume in tier-one countries," which account for the largest number of airline tickets sold and comprise China, Germany, Japan, the United Kingdom and the United States. According to Unitaid information, indirect volume represents "65 percent of all air travel tickets sold worldwide."
According to a Sabre spokesman, the company "has actively participated in the ramp-up phase with the Millennium Foundation over the course of the past six months, covering both process and technology issues. Sabre is working towards a pilot program with a small number of agencies, with the goal of thoroughly testing a technology solution that seamlessly facilitates the opportunities for donations to the Millennium Foundation. We anticipate being able to coordinate the launch of our optional solution for Sabre-subscribing agencies in conjunction with the Millennium Foundation's formal launch early in 2010."
American Express also supports the Millennium Foundation and the voluntary solidarity contribution but was unable by press time to provide details of its involvement. Travelport provided no additional information for this article.
More Countries Getting Involved
As the GDS-enabled initiative advances, Unitaid continues to develop its initial air travel funding source: the mandatory tax on airline tickets levied on a country-by-country basis. According to Unitaid's January presentation in Geneva, the organization "will continue to encourage new countries to implement the tax (e.g., Portugal is likely to join in 2009). But some countries are not likely to join this initiative: the United States already is not likely to implement it because of the 'tax' dimension."
According to a June 2009 International Heath Partnership report, the existing solidarity levy "is mandatory for individuals buying airline tickets in participating countries; it is imposed on international departures, but not on transfer passengers. It is progressive, since a higher tax rate is applied to business class than to economy class tickets. It is paid by passengers when buying their tickets, normally as an addition to existing airport taxes. Airlines are responsible for declaring and collecting the levy."
The report added that the levy now is applied in Chile, Congo, Côte d'Ivoire, France, Republic of Korea, Madagascar, Mauritius and Niger, with several nations expected to introduce it soon, including Brazil, Cameroon, Central African Republic, Gabon, Guinea, Liberia, Mali, Morocco, Namibia and Senegal.
By the time the solidarity levy was conceived, the Clinton Foundation--which now serves as Unitaid's purchasing agent--"had lowered the price of pediatric medicine from $600 to $190," Clinton told NBTA delegates. "But because of their money, because of people getting on an airplane at Orly Airport [in Paris] or some other place in France, and because two dozen other countries kicked in more modest sums, we were able to get the price down to $60. Two-thirds of all the kids in the world today who [require] medicine to stay alive, who through no fault of their own have AIDS, are alive because of this program."
