Agency Bailout…
I have to wonder why nobodies talking about AmEx becoming a bank holding company? From what I’ve read about this in Travel Weekly, this idea of any Travel Agency being owned by a bank would be considered an unfair business advantage.
AmEx is asking to borrow $3.5 billion which means that the largest travel agency in the world will now be owned by a bank. Shares of American Express fell $2.35, or 10.5 percent when news first broke, to $20.05 November 11th. Shares continue to fall as the stock closed at $19.64, its lowest point since 1998.
“For decades, from the late ’60s into the ’90s, travel agents fought to keep state and federal banks out of the travel business, regarding them as sources of unfair competition. Agents were often concerned about the competitive impact of cross promotions, whereby a bank might offer a travel benefit to someone opening a new bank account.”
All this fighting, for now at least, seems to have been forgotten. It’s been more than a week, and while I’ve been attempting to follow this story, there’s been not one word spoken about this on any forums or boards I could find. Even after this stories been printed.
Stephen Feeley, director of communications for American Express Business Travel, said the change in status would have no effect on the company’s travel agency business. “It will be business as usual.” However the tax dollars given to American Express could produce an unfair advantage over any other agency, like possibly credit needs to expand, and that I’m sure won’t sit well with the rest of the industry.
American Express, which operates two banks in addition to its travelers check, credit card and travel businesses, won approval to become a bank holding company subject to regulation by the Federal Reserve.
Joanna Lambert, vice president for corporate communications for American Express Co., declined to comment on the report or even confirm that an application had been made or American Express would “build a fence” around a loan to the company to prohibit the agency from having access to the billions it “bank” now has access too. In addition, there’s a concern about the competitive impact of cross promotions of how a bank might offer a travel benefit to someone opening a new bank account.
Yet, not one word from even one travel agent.
Nice to know some have their priorities straight.
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December 2nd, 2008 at 9:53 am
Of course they have their priorities straight Doug! The priority right now is to “rid the world” of the MLM business model in the travel industry!
I saw the article about AmEx yesterday and wondered if we would here anything from the TA’s. I wondered if we would hear anything about the other companies that shut the doors leaving the customers and the employees out in the cold. I saw little to nothing.
Priorities. Their priorities are so resolute that they had to blog about it over the whole holiday weekend when normally the weekends are taken off. I thought it was quite sad. It would seem to me that putting that much energy into bringing down YTB, on a weekend where we focus on the things we are thankful in our lives, could indicate just how happy some people really are.