23 May 2002

The company also announced today in Beijing that it is the first business travel joint venture in China fully licensed by the Civil Aviation Administration of China (CAAC) and the International Air Transport Association (IATA). It has been granted the first license for domestic ticketing issued by CAAC to a joint venture company in China, which enables the company to issue domestic tickets directly to customers. Together with the IATA license for international ticketing, the company can now offer full services for business travelers, thereby managing their travel expenses more effectively both locally and around the world.

The joint venture company has started operations in Beijing with 60 employees and is based in the Oriental Plaza on Chang'an Avenue. The mission of CITS American Express Travel Services is to provide customers in China with the same high quality business travel services as received by American Express customers worldwide, to help China develop a business travel management culture, and to help multi-nationals and corporations reduce costs through effective travel management. 

CITS American Express Travel Services Limited will provide business travel management services to clients from multi-national corporations, regional companies, and domestic companies. These include obtaining and handling visas, international and domestic flight reservations and ticketing, hotel reservations, convention services and other land arrangements. 

Speaking at the official opening ceremony in Beijing, Mr. Charles Petruccelli, President of Global Travel Services at American Express, said, "American Express is committed to the development of the travel industry in a post -WTO China. We are proud to be the first joint venture in China to be fully licensed by both CAAC and IATA. CITS American Express is well positioned to help companies and multi-national corporations in China with their travel needs and improve their bottom line with significant savings in business travel and entertainment (T&E) expenses."

Mr. Li Lu-an, President of CITS Head Office commented, "The business travel market is one way we can build on our 50 years of experience in the travel market in China, and American Express is the perfect partner to help us do this. Together with American Express, we can provide business travelers in China with a wide range of services and products that are of international standards."

The annual business T&E expenses in China are estimated at USD10.3 billion, of which USD4.2 billion are annual business travel expenses. This represents approximately 17% of the business travel market within Asia and this figure is expected to grow exponentially following China's accession to the WTO. In addition, a number of research reports conducted by American Express on a worldwide basis show that T&E expenditure consistently ranks as the second or third largest controllable expense for corporations. By implementing appropriate travel management programs, companies can significantly reduce their T&E costs by 25% on average. 

Mr. Petruccelli commented, "American Express is the world's largest travel management company, and has formed strategic alliances with local partners in the US, Europe and Asia. By working with CITS, our travel joint venture company has the capabilities and experience to offer unmatched assistance to local and multi-national companies in China in managing their travel expenses. We are also actively exploring opportunities to expand our services to other parts of China." 
Savings opportunities in T&E expenses.

American Express is committed to growing its business travel worldwide. As a business partner for companies, American Express can help manage and control T&E and purchasing expenses. For companies in China, American Express has identified possible savings opportunities in the following areas of T&E management:

- American Express has the expertise in helping companies develop travel policy tailored to the specific travel needs of their employees. Travel policy forms the foundation for the entire travel management program. Proper implementation can help optimize savings potential. 

- American Express helps companies to negotiate with travel suppliers, such as airlines and hotel chains, to act as a facilitator between companies and suppliers and also to participate in the negotiations. Volume-related discounts can be achieved for customers.

- American Express offers an integrated corporate card program, giving employees a flexible business expense payment tool whilst ensuring central control of employee expenditure for the company.

- American Express advises companies how to automate internal processes related to expense management, thereby reducing processing costs. The company has developed a host of automated products and services that simplify and automate workplace T&E processes.

American Express has had a presence in China for over 85 years. Cooperation between American Express and CITS dated back to more than two decades when CITS was appointed as the ground service provider for American Express inbound group tours in 1980. In 1993, American Express appointed CITS as Travel Service Representative in China, providing travel services to American Express customers. Since then, 18 CITS offices have been converted into American Express Travel Service Representative Offices, covering 12 major cities in the country. 

American Express is the world's largest travel management company with 1,700 Travel Service locations worldwide in over 130 countries. Through its Corporate Services group, the company counts over 70% of the Fortune 500 companies in the U.S., along with tens of thousands of mid-sized companies, as customers of its Corporate Travel, Corporate Card and Corporate Purchasing Card. Founded in 1850, the American Express Company is a diversified worldwide travel, financial services and network services company. It is a leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking. 

China International Travel Service (CITS) is China's largest and most influential travel agency. Founded in 1954, the CITS Head Office has provided travel, hotel and transportation services to more than 7 million tourists from all parts of the world. A large-scale state-owned enterprise with total assets of over 1.7 billion yuan, the CITS Group deals in tourism investment, aviation, satellite communications, computerized reservations, hotel management, insurance and tourism infrastructure construction. The CITS Group has 160 affiliates nationwide, as well as twelve subsidiaries in the United States, Japan, France, Sweden, Denmark, Germany, Canada, Australia and Hong Kong. CITS is an affiliate member of the World Tourism Organization and the company's President, Mr. Li Lu-an, serves as the Chairman of the China Tourism Association.