Teletext Holidays and the optimalpayment strategy

Webinar21 October 2015

Your hosts

Sean O’NeillEditor-in-Chief & ModeratorTnooz

Gene QuinnCEO & ProducerTnooz

Your presenters

Ian JohnsonDirector, Sales, Virtual PaymentsWEX Europe

Steve EndacottNon-Executive ChairmanTeletext Holidays

Lee JacksonStrategic Sales ManagerWEX Europe

Poll no. 1Where are you located?

Poll no. 2Which business segment do you represent?

Teletext Holidaysandtheoptimalpaymentstrategy

October21,2015

What’shappeninginthetravelindustry?

What’shappeninginthetravelindustry?

Wherearepeople travelling?Howaretheygettingthere?

Whatdoesthismeanforpayments?

Wherearepeopletravelling?

Consumersareincreasingnumber oftripsanddrivingdemandforcustomised packages

Holidaymakers seekmorevariedexperiences,including newdestinations,multi-centre,andactivityholidays

Thedestination landscapeisvolatileanddestinationchoiceisimpactedthroughglobaleventsandchangesinperceivedsecurity

Customers are spending more and demanding more

LowCostCarriersofferagrowingindependentandflexiblenetworkforleisuretraveloperations

Howaretheygettingthere?

Poll no. 3How do you pay low cost carriers?

LowCostCarriers(LCCs)aregrowingcapacityversusLegacycarriers

ServicelinesbetweenLegacy&LowCostCarriersarelessclear

LCCslinked totradeandbusiness through GDSandonlinebookingplatforms

Howaretheygettingthere?LowCostCarriers’ShareoftheEuropeanAviationMarket

LCC

Legacyandcharter

*DataProvided byOAG

64%

36%

RyanairOthers

Howaretheygettingthere?

LowCostCarriers(LCCs)replacingcharterservicesfortouroperating

EmergenceofLowCosttouroperations

LCCsofferstheLeisureTravellerinbound&outbound choice

Europe’sTopSixLowCostAirlines

Ryanair

easyjet

NorwegianAirShuttleVuelingPegasusAirlines

germanwings

Others

Whattravelindustrydevelopmentmeansforpayments

SUPPLIERACCEPTANCENon-contractedpayments

CurrencyFluctuationFXFees&Surcharges

PROCESSPRESSURERetainandincrease

automationImpactonsalestime

Cashflowpressure

SECURITYCONCERNSProtectingconsumer

dataExposuretomerchant

fraud

GROWTH&DIVERSIFICATION

Poll no. 4How is your current solution for paying LCCs

integrated into your booking process?

LCCMarketindetail

generatedoncreditcardsurchargesperyearonlyinUKEdgarDunn&Company

GrossbookingsforLCCswillexpandby

26%from2013to2016PhocusWright, 2015

£300m Regulation• EuropeanTravel

Package• ATOLScheme

intheUK

ConsumerbehaviourMetasearch engineusageisexpanding.Priceiskey

WhataretheimplicationsforTeletext Holidays?

ChallengesfacedbyTeletext holidays

Pressuretostaycompetitive withnomoneyleft inair

Profitability&competitiveness Regulatoryimpactoncashflow

Beinginnovativeinfindingwaystosavemoney

Focusingonmaximisingperbookingprofitability

Travelbecomingmoreregulated

Trustfundpiecerequiredbylegislation

Strugglingtomaintainpositiveworkingcapital ingeneral

Pressuretostaycompetitivewithnomoneyleftinair

Costof2%forairlinesurcharges

Metasearchincreasingandrankingisbasedonpriceoffered

Howtokeepcostsdownandmaintainmarketshare

Consumerslookingforbargainsandcomparingeasilyonline

Maximisingperbookingprofitabilitythroughsplitflying

CheapestwayisbuyingoutboundinGBPandinboundinEUR

AirlinesusedfixexchangerateswhichpayinginEURavoids

Thisisonlypossibleoncorporatecards,notconsumercards

ReconciliationofsplitflyingneedsVCN’sautomaticreconciliationfunctionality

Trustfunds

UnderFlightPlustheCAAseektoputtheretailerinthefrontlineifanairlinecollapsesandmakethemresponsibleforreplacingflights

UsingVCNsheremeansarechargeincaseofairlinefailuretoensurecustomersgettheirmoneyback,viathe“nonproductdelivery”mechanismbackintothetrustfund

Rechargingcardsischeaperthansupplierfailureinsurance

Customer’smoneyiskeptintrustaccountforupto5businessdays

Maintainingpositivecashflow

TrustfundworkflowmeansOTAsareoutofpocketforupto5days

Airlinerequiresimmediatepayment

Needprepaidproducttoavoidsurcharging

OTAshavenoorverylittlecashtoplaywith

Poll no. 5What are the biggest concerns for your business in making LCC reservations?

HowWEXandTeletext workedtogetheronthesolution

WEX’ssolutiontohelpTeletext

AirlinePaymentsTop3Concerns

Avoidsurcharges

Minimise forex fees&risk

Maximise cashflow

SolutionforAirlinePayments

1

2

3

Acreditfacility

debitcardattributes

multicurrencycapabilities

Prepaidfundingvs creditfacility

Prepaid Credit

Account fundingby Customer WEX

Surchargeavoidance ü ü

Currency capability ü ü

Reduceadmintime û ü

Automated funding û ü

Positive cashflow û ü

Creditfacility û ü

SolvingtheproblemwithWEXAirlinePayments

How WhyPayairlineswithdebitVCNstoavoidsurcharges

Save2%perbooking: £8per£400flight

Increasesalesthroughmorecompetitivepricing

Improveperbooking profitability

Payandsettleinmultiple currencieswithoutFXorconversion fees

Usecreditaccountto:

Payairlineimmediately

Avoidbeingoutofpocketwhilstcustomerfundsareintrustaccount

Increasecashflow

HowDoesItWork?BEFORE

CustomerbooksflightwithOTA

Customer’smoneygoesintotrustaccounts

OTAgetscustomer’smoney

5days

OTAisoutofpocket

OTAusespre-funded debitcardtopayairline Avoidssurcharge=2%costsaving

5da

ys

HowDoesItWork?AFTER

CustomerbooksflightwithOTA

Customer’smoneygoesintotrustaccounts

OTAgetscustomer’smoney

5days

OTAhasimprovedcashflow

OTAfundsdebitcardfromcreditlinetopayairline Avoidssurcharge=2%costsaving

5da

ys

MajorEuropeanCurrenciesAvailable

MajorEuropeancurrenciessupported

NoFXriskandnofx orconversionfees

Billingandsettlementinsamecurrency

Saveupto2.5%oninternationalpayments

TotalcurrencycoverageofEuropeanLCCmarket

Globallyatotalof22billingcurrencieswithtransactionsoccurredinover45currenciesand190countriesworldwide

Examplebusinesscase

ExampleBusinessCase

Averagebookingvalue£400

Totalspend£50m

85%

125,000bookings/year CreditLine(10-dayterms)

£2m

Surchargeperbooking£8

NOFXfees15%

ExampleBusinessCase

Cashflow

NetSurcharge

£0.03m

£1.0m

£1.03mTotalBenefits

Overview

Overview

GrowthofLCCs

Keychallenges

SolutionforAirlinePayments

Profitabilityandcompetitiveness Regulatoryimpactoncashflow

2%savingperbookingEnhancedcompetitiveofferingandperbookingprofitability

PayinmultiplecurrencieswithoutFXorconversionfees

Poll no. 6From what you’ve heard today what would

have the most impact on your business?

Q & A

Thank you!

Send your questions and comments to gene@tnooz.com

Replay and presentation will be available on www.tnooz.com