Sticking at it

Galileo International is like the glue that holds the travel industry together, but like much of the sector, has it become unstuck post-11 September? Fiona Callister investigates

If you have been on holiday in the last three decades, then there is a good chance that Galileo had a hand in bringing you your fortnight in the sun. The company specialises in providing the links between airlines, hotels, car rental companies and the like and your local travel agent. In fact, it links up around 45,000 travel agents with 500 airlines, 32 car rental companies, 50,000 hotels and 368 tour operators.

Perhaps with those sort of global links, it is inevitable that one of head of legal Pam Lusby Taylor’s chosen law firms is Baker & McKenzie.

“I have used Baker & McKenzie in the past and they’re very good for international work because they’ve got so many offices in different countries,” explains Lusby Taylor.
The other two law firms she uses regularly are Richards Butler and the Oxford branch of Manches. The former she uses mostly for competition law, property work and litigation, the latter for employment work.

Lusby Taylor inherited Richards Butler from her predecessor, while Manches was brought on board by a new recruit to the in-house team last year who had worked with the Oxford office in the past.

Baker & McKenzie tends to do a lot of contractual work for the company as well as data protection-linked work and corporate work.

As for how much work goes out to the external firms, Lusby Taylor says it is hard to quantify. “When we outsource, it’s just because we don’t have the international capability ourselves, or it’s a huge volume thing like a huge corporate matter,” she says. “Otherwise we’d do as
much as we could in-house.”

When pressed, Lusby Taylor says that the “large majority” of work is done in-house, but she cannot be more specific. She adds that, generally, property and litigation are outsourced as the team lacks those capabilities in-house.
However, small changes in one of those areas might be afoot. A new lawyer taken into the team last year has some litigation experience and so has started to handle smaller pieces of work.

Although Baker & McKenzie, Manches and Richards Butler do not comprise any formal panel and Lusby Taylor remains free to choose other firms, she points out that recently the team has not had the need to do so. “The three that I work with are firms that I really enjoy working with and have individuals that I like,” she explains. “I get along well with them; they’re very responsive to us and really deliver. We’re always looking for quality.”

She adds that she does not have any plans to add to her regular law firms because, luckily, there is nothing they do that irritates her, either in the present or the past.

The in-house team and external lawyers tend to remain separate, says Lusby Taylor, with only the occasional paralegal coming in from outside to help. Jobs are only outsourced in their entirety if the in-house team cannot handle them.

Recent deals for the company include a new distribution agreement signed last year by a consortium of Arab airlines. The deal was signed by the end of May, well before the events of 11 September.

“That kept me quite busy,” remembers Lusby Taylor. “It was a multipartheid agreement dealing with seven or eight airlines rather than the usual one-to-one basis.”
The year prior to that, the largest deal to emanate from the UK was the purchase by Galileo of Travel Automation Services, which included Galileo UK, from British Airways.
The deal reflected the historical structure of Galileo. The company grew from a computer reservation system set up by United Airlines. In 1987 United sold half the company, then named CoVia, to five airlines, with six other airlines joining two years later.

“Originally we were owned by a consortium of airlines, and those airlines tended to set up a distribution arm,” explains Lusby Taylor. “Thus Alitalia is the distributor in Italy. In 1997 [following the flotation], we started to acquire some of those companies.”

And last October Lusby Taylor helped on a deal that was also closer to home – the sale of Galileo to business and consumer provider Cendant for £2.9bn. For that deal she was called upon to carry out due diligence. The deal, however, was led from Galileo’s base in Parsippany, New Jersey.

Besides the Parsippany and Windsor offices, the company also has two other offices in the US and a Hong Kong base.
From Windsor, Lusby Taylor covers Europe, Africa and the Middle East. It is little wonder, then, that foreign language skills are important to her when she is hiring for the team. “My degree was in Latin, but that’s not all that useful,” she admits, although she does speak fluent French.

The distribution deal with the Arab airlines meant quite a few trips to the Middle East for Lusby Taylor but otherwise, she says, while the work has great variety and international scope, the amount of foreign travel is limited to keep overheads down.

The three lawyers in the department are divided along geographical lines rather than specialisations, with Lusby Taylor covering the Middle East and Africa. She uses both Baker & McKenzie and Richards Butler when the company is working abroad, the latter being used for advice in Paris, Greece and Abu Dhabi.

“We don’t use local law firms,” she explains. “We need law firms who know our business well and have quite a bit of background, so you’re not trying to start afresh every time.” Lusby Taylor has also used leading law firm Deneys Reitz in South Africa, but otherwise sticks with the firms she knows and whose UK offices she knows well.
As for how the business has been hit since the downturn in the aviation industry following 11 September, Lusby Taylor is keeping quiet. Fortunately, the company had acquired the Swiss arm of Galileo from Swissair before that airline hit the Tarmac.

“[The aftermath of 11 September] had an impact,” admits Lusby Taylor. “But we’re coming through that now.”
Pam Lusby Taylor
Head of legal
Galileo International

Organisation Galileo International
Sector Traval and technology
Employees 3000
Legal capability Three qualified solicitors and one trainee
Head of legal Pam Lusby Taylor
Reporting to Managing director Gordon Wilson
Main location for lawyers Windsor, Berkshire
Main law firms Baker & McKenzie, Manches and Richards Butler