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International trade is the exchange of goods and services across international boundaries or territories. In most countries, it represents a significant share of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact. Increasing international trade is the usually primary meaning of "globalization".

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NYT > World Business

Food and Gas Prices Taking a Toll in Asia
Tue, 22 Jul 2008 20:13:45 -0000
With large price increases for commonly used commodities, countries like India and Vietnam are already having to deal with double-digit inflation.
U.S. Offers a Subsidy Concession at Trade Talks
Tue, 22 Jul 2008 15:09:51 -0000
In global trade talks, the United States offered to cut $1.4 billion more in subsidies to American farmers than in its previous offer.
BP Will Withdraw Its Engineers in Russia
Tue, 22 Jul 2008 19:11:11 -0000
BP is fending off a corporate raid by its Russian partners backed by Russian regulatory authorities, a strategy to expel expatriate staff members from their joint venture.
Vodafone Cuts Revenue Forecast
Tue, 22 Jul 2008 14:22:33 -0000
Vodafone, the world’s largest cellphone operator, said it was cutting its revenue forecast for the year to around $79.6 billion, the lower end of its previous estimate.
G.E. Partners With Abu Dhabi Fund
Tue, 22 Jul 2008 19:07:42 -0000
G.E. said it would partner with Mubadala Development Company, and Abu Dhabi-based sovereign wealth fund, to create an $8 billion commercial finance fund.
Roche Offers $43.7 Billion for Shares in Genentech It Does Not Already Own
Tue, 22 Jul 2008 03:22:43 -0000
The Swiss drug maker Roche Holding said it was offering about $43.7 billion to acquire the 44 percent of Genentech that it did not already own.

Portfolio.com: Business Travel

Don't Take a Flier on Airlines
Tue, 22 Jul 2008 04:00:00 -0000
Even as the nation's network carriers began reporting billions in second-quarter losses last week, a furious rally drove share prices up by 45 to 60 percent. The market shrugged off the $1.4 billion loss reported by the parent of American Airlines, the nation's largest carrier, and ran its stock up 59 percent. The nation's second-largest airline, United, will report losses in the $3 billion range this week, yet its shares climbed 58 percent. Why the irrational aeronautic exuberance? Last week's unprecedented decline in the price of oil, which plummeted more than $16 and closed around $130 a barrel. With fuel now accounting for about 40 percent of the airlines' costs, sharply lower oil prices surely looked like good news to the markets. But irrational exuberance is nothing if not irrational. The biggest airlines—American, United, Delta, Northwest, Continental and US Airways—can't make money at $130 a barrel. They can't make money at $100 a barrel, either. Nor can their smaller competitors. Even the double-digit cuts in passenger capacity and triple-digit aircraft retirements planned for the fall probably won't restore profitability unless oil drops to about $80. (That's what oil sold for late last summer, the last time the big carriers were consistently profitable.) And since both business- and leisure-travel demand is falling, the price hikes and fee increases announced with metronomic regularity this spring and summer are likely to be offset by fall and winter fare sales. "Don't you dare rain on my parade," an airline executive snapped at me Friday evening. "I want one weekend this summer when I can fantasize about not being in bankruptcy next year." I hope he enjoyed his weekend, because that brutal reality—every U.S. carrier except Southwest Airlines faces bankruptcy and possibly even liquidation—cannot be ignored. None are sufficiently hedged against triple-digit oil prices. None can ground planes or lay off staff fast enough to keep their corporate heads above the rising tide of red ink. And there's no playbook to consult. Think I'm being irrationally pessimistic? Tell it to Fitch Ratings, which says there could be "multiple bankruptcies and liquidation" among the major airlines next year. "The industry's current structure is unsustainable in the current fuel environment," Fitch said last week. And if you don't like analysts analyzing, listen to Virgin Group's Richard Branson, whose own worldwide airline empire is shaky. He predicts "spectacular casualties" among the big carriers in the next 12 months. Perhaps most frightening is that no one can agree on which of the carriers are most at risk. Last Friday, for example, J.P. Morgan Chase double-jumped United shares to "overweight" from "underweight," primarily because the lead analyst thought the airline would announce a big new borrowing scheme this week along with its second-quarter loss. But just hours later, Moody's cut United's debt rating two steps to "Caa1," seven notches below investment grade. What's the chaos mean in the long term for business travelers? To be honest, I don't know. Even 30 years of plopping myself down in seat 2B isn't particularly preparatory or enlightening. And the longer oil prices remain in triple digits, the less the lessons of the 1990 to 1995 period seem revelatory.  But I can offer several watch-your-back tips for the next several months on the road. Confirm Your Flights If you've booked travel for any time after Labor Day, make sure your flights are still on the schedule. Airlines have dropped routes without notice all summer, but the big tranche of cancellations begins on September 2. Overnight, most carriers will shrink their schedules 5 to 15 percent . Even if your airline will still fly on your route, it may have cut frequencies, so check that it has "protected" you on another flight and remembered to match up your onward connections. Avoid Smaller Airports The airlines are weeding out service to smaller airports, partially because they bring the least traffic into their hubs and also because the routes are flown with inefficient regional jets. If possible, book flights from the closest hub instead. Expect Less Help As they scramble to cut costs, airlines are thinning their already depleted ranks of front-line airport employees. That'll mean longer waits to check in, check bags, and load passengers and luggage onto planes. Carriers are also chopping mechanic jobs, so there will be more delays and cancellations for mechanical reasons. And wherever they had staffed flights above the federally mandated minimums, they are reducing the number of flight attendants. That means even less in-flight service. Have a Plan B—and a Plan C Although wags now openly speculate on the survival odds of one carrier or another—Midwest, Frontier (already operating in Chapter 11), US Airways, Sun Country and Spirit seem to be popular picks in death pools—I wouldn't assume any carrier will fold. Or survive. Know your options for every flight you book. And carry your Plan B and Plan C with you in case your carrier folds while you're on the way to the airport. Seriously. Drain Your Mileage Programs Finally, stop "banking" frequent-flier miles. If you've got enough miles to claim an award, use them now. The value of miles is depreciating even faster thanks to the route cutbacks and new fees imposed when you redeem an award. Besides, if your airline collapses, there's no guarantee that another carrier will step in and honor unused miles. The Fine Print… Midwest Airlines, the Milwaukee-based boutique carrier, is the latest to slash its operations. It announced on Sunday that it would contract its overall capacity by upward of 40 percent. By September, it will have grounded about a third of its aircraft and cut a dozen cities off its route map. Related LinksWhy Airline Mergers Don't FlyFlying on Empty Deals Taxi for Takeoff
In for a Landing
Wed, 16 Jul 2008 10:00:00 -0000
When Herb Kelleher started Southwest Airlines in 1967, he was a pariah, a chain-smoking, Wild Turkey-swilling lawyer-entrepreneur who tried to undercut his established competitors. The airline was in legal limbo for four years because of disputes over flight routes before its first plane was allowed to take off. Four decades later, Kelleher’s upstart airline is now the country’s largest in terms of market capitalization and has posted a profit for 35 straight years. It’s the only major U.S. carrier making money right now, even as smaller airlines fold at a rate of about one a month and legacy carriers, stuck with record-setting fuel prices, stagger toward bankruptcy. This spring, at age 77, Kelleher retired as Southwest’s chairman and scaled back his responsibilities to an advisory role, a position he’ll hold for five years. It’s a good time for him to ease up. The airline business is going through a difficult period, and Southwest was recently hit with a $10.2 million fine because it had flown planes after their required inspection dates. But Kelleher leaves Southwest in excellent shape compared with its peers. With a $10 billion market cap and ample cash reserves, it’s poised to solidify its ­position as the low-fare airline. Condé Nast Portfolio reporter Matthew Malone met Kelleher at Southwest’s Dallas headquarters, where the executive, a longtime three-pack-a-day smoker, elbowed up to a silver ashtray the size of a turkey platter. Kelleher has never cared much about appearances, and he’s certainly not changing now. During the 90-minute interview, he smoked four Merits, kissed a Southwest intern on the cheek, and jokingly picked his nose. He also talked about the foolishness of mergers, the state of the Federal Aviation Administration, and why February is the worst damn month of the year. Between the lackluster economy and soaring fuel prices, some say that things are downright apocalyptic for airlines these days. Is the business model simply one that doesn’t work anymore? It’s very difficult to make it work when oil is at $130, $135 a barrel. Southwest has been protected from many of the difficulties of this time: Our fuel hedges saved us $727 million last year alone. But our revenues are down as a consequence of higher fuel costs, and I think our principal advantage at Southwest and in this milieu is the fact that we’re so strong financially. We have the lowest cost in the industry per available seat mile, the strongest balance sheet, the most equity of any carrier, so we’ve always been fit for whatever exigency confronted us. We’ve always been very conservative and made sure that we’re ready for the bad times, because they always come. The last major round of restructurings, after 9/11, allowed the legacy carriers to cut into Southwest’s cost advantage. More restructurings and bankruptcies are on the way. Will that make the company more vulnerable? No. As a matter of fact, I think our competitive advantage is widening. The other carriers are increasing fares and adding fees so quickly that I think that we’re regaining our low-cost-fare advantage. There’s another factor: I refer to Chapter 11 as the washateria—you go to the washateria, and you wash out all your sins and get a fresh start. Once you’ve been through it, your opportunities are narrowly constricted with respect to restructuring, because you’ve already terminated your benefit pension plans, you’ve got a reduced lease rate on your airplanes, you’ve gotten better financial terms from your lenders, and it’s very hard to come up with substantial savings the next time around.   If you had a crystal ball, what would it reveal about where the ­industry will be a year from now? I’d love to give 10-year projections. The shorter ones are harder. It depends on where fuel prices are, but I think you’ll see fewer airlines. That process has already started, with the airlines that have ceased operations. Consolidation is something that a number of carriers think is a way to salvation. I’m not sure it is, as far as fuel prices are concerned, which is the primary issue. The Delta-Northwest merger is well on its way. They have to jump the regulatory hurdles, and then, of course, you have to work like crazy to make sure it actually works out the way you had planned. Which carriers are the most vul­nerable to going under? I never get into that. I don’t want to be a party to a run on the bank. One of your last official duties as chairman was to testify before Congress about the fine that Southwest had to pay over safety inspections. Some planes were flown after their official F.A.A. inspection dates. What’s your take on that incident? We reported ourselves to the F.A.A.—that we inadvertently and unintentionally missed these inspections, and the principal inspector said, You’ve got 10 days to do it. There may have been a technical issue, but there was never a safety issue. And there were never any planes that placed passengers at risk. I don’t mean to demean it, but in a sense it was a question of filing the wrong form, so to speak. Boeing said flying the planes was okay, and a former lead investigator for the National Transportation Safety Board said it was okay. There was no threat. Would you do anything differently? The appropriate route would have been to go and get an alternative means of compliance from the F.A.A., and I’m quite sure that they would have granted it. That’s what I regret, that we didn’t do that. That whole issue became political pretty quickly, and in the middle of it, you scrapped plans to outsource some of Southwest’s maintenance to an operation in El Salvador. Why the change? It was a question of timing. We didn’t say that we would never do it. We just said we’re not going do it now, because we don’t need to add a layer of complications with respect to a new maintainer. Outsourcing is a word that covers a multitude of different concepts, and you have to realize a lot of the talk about it is really a product of union activity, where they’d like to keep the work in the United States. From a safety standpoint, it’s perfectly safe. Now that you’re stepping down, how much interaction will you have with the company? Really, what I am here is C.E.O. Gary Kelly’s servant. He is a superb chief executive officer, and I would anticipate that he would ask me from time to time to get involved in some special projects. The dustup with the F.A.A. is an illustration. I really serve at his beck and call. Is there some innovation that you think could help save this industry? Something on the horizon that you look at with great interest? Well, no. I don’t think there’s any silver bullet. I think the carriers in the present circumstances are doing exactly what they need to do in order to survive. For the first time in my memory, they’re very busy reducing capacity, which of course will provide fewer seats. That saves fuel, and you’re able to raise fares, I think, fairly substantially. Fewer and fewer people will be flying, and in a sense that’s a sad thing for me. A lot of the American public will be deprived of the opportunity to fly. But I think the carriers have to do it. They don’t have any alternative.  How much will fares go up during the next 12 months? The latest figures I saw, through April or May 2008, was that average fares had gone up 4.8 percent already this year. And with reductions in capacity, I wouldn’t be surprised if average fares went up by another 5 or 6 percent this year. I’m not talking about Southwest, by the way, just the legacy carriers. The F.A.A. has been under a lot of pressure lately. What’s your view of the agency? The F.A.A. has a splendid record. There’s no question about that. Commercial airline travel has never been safer, and it’s grown steadily safer over the past four or five years, so the end result has been superb, absolutely superb. I think reform of the air-traffic-control system is the major issue facing the F.A.A. as a whole. It’s an antiquated system, and a lot of the difficulties that we were talking about earlier for the airlines would go away if you had a modernized system that was more efficient. I’m hopeful that we’ll make steady progress toward the adoption of next-gen, as they call it—an air-traffic-control system that will be G.P.S.-oriented. What has prevented that from hap­pening so far? You’re stepping on a sore toe right now, because I became an apostle of that in 1993, and here we are 15 years later and we haven’t made a lot of progress. Backpackers are using G.P.S. to find out where they are in the woods. Truckers are using G.P.S. to find out which routes they should take to their destinations. Buses are using it. Private aircraft are using it. Let me see, who are the only ones who don’t have G.P.S.? Commercial airlines. Isn’t that astounding? You have to be a visionary and say, “We don’t need this today, but we’re going to need it very badly 10 or 15 years from now.” Airlines need it, but the government has to take the steps to set it up. If you stop to think about it, we’re really a little slice of salami in a governmental sandwich. The F.A.A. tells us what we can do with the airplane, right? You can’t push back from the gate, can’t taxi, can’t take off without the F.A.A. telling you. Our passengers on the ground are processed by the Transportation ­Security Administration. And guess who owns the airports. Governmental bodies. That’s why we have so little control over our destiny. Don’t misunderstand me—all of those things are needed. But it would be interesting if you said that all department stores are now going to have X-ray machines. You’re going to have to take your shoes off, your coat off, before you get into Macy’s. That might cut back on their patronage just a little bit. Is there a particular day or incident from Southwest’s history that you remember most fondly? For sheer drama, I would have to say that after litigating for four years in 31 different courts and administrative agencies, the arrival of our first airplane was a pretty dramatic event. I burst into tears when I kissed it on the nose and then went around and stuck my head in the engine, at which point a mechanic grabbed me and said that if the thrust reverser went off, it would decapitate me. I said, “You know? I really don’t give a damn.” What’s the worst investment you ever made? Gee, there are so many, it’s hard to pick out one. Enron, I guess. I must say, I didn’t pick Enron. It was a money manager. So choose one: the cigarettes or the Wild Turkey. Ha! It would be the cigarettes, and I’ll tell you why: I stop drinking Wild Turkey for a month every year in February, but I could never stop smoking for a month. I’m an addict. I acknowledge it. Why February? I was afraid you were gonna ask that. It’s the shortest month. [Laughter] About 20 years ago, a doctor told me, “As much as you drink on a regular basis, I think it’d be great for your liver if you took a month off.” So I said okay—February. I hate leap years! Despise them.   Related LinksThe Safe (but Scary) SkiesFlying SoloFlying on Empty
Gold-Medal Schmoozer
Wed, 16 Jul 2008 10:00:00 -0000
Back in 2001, Sead Dizdar­evic’s name was inseparable from the Olympic movement—but it wasn’t exactly the association he sought. The smooth-talking hospitality pitchman had first burst upon the Olympic scene in 1983 by finagling the right to sell, through a modest travel agency he owned in Staten Island, New York, package tours to thousands of Americans wanting to attend the Winter Games in his native Sarajevo, Yugo­slavia. But some two decades of Olympic wheeling and dealing later, he was almost laid low when he was swept up in a cash-for-favors scandal involving Salt Lake City’s bid to host the 2002 Winter Games. A number of International Olympic Committee members were forced to resign when it was discovered that they had accepted bribes in return for voting to award the Games to Salt Lake. Two prominent Salt Lake bid officials were indicted for fraud in the scandal, and one city official intimated, in a memo that ended up in federal court, that Dizdarevic had pretty much put the idea that the Games could be bought into local Olympic officials’ heads. Dizdarevic escaped federal prosecution himself only by agreeing to testify that he’d assisted in the payoff scheme. He admitted that he’d given $131,000 to the Salt Lake officials—which they used as bribes—hoping his favors would win him the Games’ contract to broker travel, lodging, and tickets. Though a judge ultimately threw out the fraud case, Dizdarevic says his brush with the law scared him straight. Well, straight is a relative term, but there is no doubt that the tawdry Salt Lake episode, rather than ruining Dizdarevic’s Olympic money machine, rejuvenated and reformed it. Now make the great leap forward to Beijing. Dizdarevic, pluckier than ever at 57, is sipping sugary espresso in the 26th-floor executive lounge of the Sofitel Wanda hotel, the French chain’s luxury flagship in Asia. His Olympic hospitality firm, Jet Set Sports, of Far Hills, New Jersey, owns the rights to 175 rooms in the Sofitel, plus the $20,000-a-night presidential suite, for this month’s Games. That’s nearly half of the five-star hotel, for 18 days, paid in full. And the Sofitel is but one property in Jet Set’s vast portfolio of high-end Beijing hotels, making Dizdarevic the must-see man for corporations heading to the Olympics. Still, on a recent swing through Beijing to nail down final arrangements, Dizdarevic is feeling fleeced. A Sofitel manager is asking $65 a head for buffet breakfasts during the Games, twice the hotel’s normal rate. The hotelier is also demanding that Dizdarevic pay extra for the grand ballroom, where Jet Set plans to wine and dine hundreds of clients for BHP Billiton, the Australian mining colossus. Annoyed, Dizdarevic counters with what he calls the Jet Set model: a package price for food, drink, and facilities for 7,800 meals, including a “guaranteed” 40 percent profit margin for Sofitel. “You should capitalize on the Olympics, but that doesn’t mean you have a license to steal,” he scolds the nattily dressed Frenchman. “Remember, I have other options, even for breakfast.” “For everything,” the young manager demurs, in heavily accented English, “you have options.”   Dizdarevic leaves without a deal, trailed by his son Alan, 25, who runs Jet Set’s China office. “They’ll learn,” Sead (pronounced Sid) says, driving off into the smog-filled city, as I tag along for the ride. It’s a lesson everyone who wants a piece of the action at the Olympics figures out: It’s Sead Dizdarevic’s world; the rest of us are just guests. Since Sarajevo, Dizdarevic has perfected the art of what he delicately calls the “advanced royalty”—paying off Olympic pooh-bahs for the ultimate service monopoly on the ultimate destination event. For years, “it was almost like an under-the-rug deal,” Dizdarevic acknowledges. He was the supreme promoter, schmoozing, boozing, and cajoling Olympic organizers and teams from around the globe—including the U.S. Olympic Committee—to secure the best tickets and accommodations, which he bundled at hefty markups for corporations and ultra-affluent clients. This system, energized by Dizdarevic’s 1,000-watt salesmanship, a world-class Rolodex, and an impeccable record for service, pumped millions of dollars of profits into his pockets—and into the Olympic coffers of several cash-starved countries. This made Dizdarevic the Games’ indispensable, if unofficial, fixer. The Salt Lake scandal ended this improvised, quasi-legal system, and Dizdarevic no longer carries around bricks of cash and unsigned traveler’s checks, which—according to Ante Jedrejcic, Dizdarevic’s former brother-in-law, who worked for him before they fell out in the mid-1990s—he once used to acquire the suitcases of tickets earmarked for, say, the Polish or Bulgarian Olympic team. (Dizdarevic dismisses his former relative as an “exaggerator.”) Nor does he still pad his payroll with the wives, girlfriends, and daughters of the powerful men he needed to grease his exclusive access to the Olympics. Now he pays millions of dollars in formal sponsorship fees to the Olympic gods, just as Nike, Hilton, and other corporations do. In exchange, he gets all the top-tier tickets and hotels he needs, plus a catchy title: official hospitality operator of the Olympic Games. But if you think this legally acquired title has quieted controversy around Dizdarevic, you’re wrong. Competitors gripe that he’s a concierge gone wild—that Jet Set’s monopoly cuts them out and that it may even violate U.S. antitrust laws. Dizdarevic seems oblivious to such bad-mouthing—or perhaps, with the Games imminent, he’s too busy to pay much attention. After marching out of the Sofitel, he spends more hours haggling over breakfasts for AT&T and Medtronic at Beijing’s Novotel Peace hotel and over lunch menus for HSBC, Herbalife, and Lehman Brothers (among dozens of others) at the Commune by the Great Wall Kempinski hotel. His mind is a sponge for details—rooms, wines, snacks, buses, tickets, distances, even wallpaper. He meets his match in a Kempinski sales director named Adelina Ye, who drags him clause by clause through their food-and-beverage contract, quibbling over such unusual demands as Jet Set’s requirement that the hotel chef order all raw materials 45 days before the Games. “Believe me, we’ve learned the hard way. There are always scarcities,” Dizdarevic tells her. Later, he dispatches an aide to find out if Ye will come to work for him. In traffic between meetings, Dizdarevic works a BlackBerry and answers a Chinese cell phone from the backseat of a black Audi. “Sergei, how are you?” he says ingratiatingly. The caller is Sergei Plastinin, the Russian dairy, fruit juice, and fashion tycoon, who’s inquiring about a luxury suite in the main Olympic stadium. “It’s $650,000,” Dizdarevic tells him without flinching, “plus my brokerage fee,” capped at 20 percent by Olympic rules. Actually, Jet Set’s corporate packages sold out months ago, but Dizdarevic, like the scalper he professes not to be, always holds certain “assets” in reserve. In Beijing, he’s husbanding most of the city’s five-star presidential suites, a dozen in all. “You sit on them, wait for people to come to you,” he tells me. “Usually the richest people come very late. They think they can get anything.”  One such request pops up hours later, in the lobby of Dizdarevic’s Beijing hotel. Over tea, Lynn Robbroeckx of ArcelorMittal says she desperately needs eight tickets to the opening ceremonies for her boss, Lakshmi Mittal, the steel magnate ranked fourth on Forbes’ list of billionaires. “We’ve been so busy running our steel business, we forgot to take care of this,” Robbroeckx says. The same thing happened in Athens, Dizdarevic reminds her. The Mittals showed up at the 2004 Games in their yacht without a place to dock. Dizdarevic had to scurry to find them an official Olympic car—to drive in the official Olympic lanes—and a berth for their yacht near the cruise ships that Jet Set had chartered for its guests. Beijing is more complicated. Though the Mittals want to attend just the first four days of the Games, Dizdarevic recommends that ArcelorMittal lock in packages for the entire period to ensure premium access. Jet Set can meet their plane at the airport, he says, but the private jet will have to land under Jet Set’s auspices because, during the Games, Beijing is only accepting the private planes of Olympic officials, heads of state, and official sponsors like Jet Set. For the opening ceremonies, the Mittals will be dropped off at Jet Set’s hospitality suite on the main Olympic Green; hostesses will escort them to their seats in the stadium, based on Olympic protocol. Afterward, they’ll file back to the Jet Set lounge. “It’s mass confusion, so we’ll need to calm everybody down with a drink,” Dizdarevic says. Robbroeckx looks relieved, especially when she hears that Jet Set will have plenty of vegetarian food on hand for the Mittals. Dizdarevic requests that the family, who lives in London, register for the trip through the Yale School of Management, which is co-sponsoring a leadership conference at the Games with Jet Set. That should avoid any territorial conflicts, because Dizdarevic doesn’t hold Olympic rights to solicit business in Britain. “And tell your boss,” Dizdarevic says, “if he wants to do any entertaining in London”—at the 2012 Games—“he needs to tell me two years in advance.” The Beijing games dwarf anything Dizdarevic has done before. Jet Set has sold more than 70,000 packages for Beijing, compared with 20,000 trips for the Turin Winter Games in 2006, its previous high. Dizdarevic has plunked down roughly $130 million on this year’s Summer Games, including more than $30 million in sponsorship fees, mostly paid to Beijing’s Olympic organizing committee; $37 million for hotels and meals; $20 million for management systems and local staff (including a yearlong course to teach local hires Olympic etiquette and how to deftly handle foreign visitors); and $15 million for tickets. He expects revenue of nearly $200 million. Beijing could have been even bigger. “I simply stopped selling,” he says. “With so much new business, I didn’t want to jeopardize delivery.” Jet Set’s rivals say that his control of the market is unfair and is possibly an illegal monopoly. “Jet Set uses tickets as their choke point for everything they do,” says the president of a sports-­management firm, who claims his company has lost several major clients in recent years because of Dizdarevic’s hold on tickets. “A service monopoly isn’t like a Coke or a Visa sponsorship,” says this person, who insists on anonymity because he fears retribution from Dizdarevic and the U.S. Olympic Committee. “You can always walk across the street and use your Amex card or drink a Pepsi. Not with this deal.” Even the U.S. Olympic team’s own corporate sponsors must go to Jet Set for tickets—leverage that Dizdarevic uses to sell them full hospitality packages, according to an executive who runs the Olympic program for one corporate sponsor. To illustrate the point, a Jet Set competitor recounts a conference call earlier this year: It was organized by a Canadian corporation for several firms vying to manage its guest program at the 2010 Winter Games in Vancouver. During the Q&A, whose participants included SportsMark Management Group of Larkspur, California, and Iluka of London, Dizdarevic blurted out, “Where will you get gold-medal-hockey tickets?” The answer is, of course, obvious. Dizdarevic has the lion’s share. After a long, knowing pause, the would-be sponsor chuckled and said, “Oh, Sead, you ask such good questions.”  Technically, each national Olympic committee controls ticket distribution in its own country. But in recent years, the U.S.O.C. and the Olympic committees of Canada, Australia, and several European countries have anointed Jet Set as their exclusive hospitality and ticket provider. Elbowed aside, other firms say they’ve explored challenging Jet Set’s monopoly in U.S. courts but are afraid of saddling the Olympic hierarchy with costly antitrust litigation. “The time to strike would have been in 2003” after Dizdarevic signed his initial deal with the U.S.O.C., one rival says. “Now he’s too big. There just aren’t a lot of people with the stomach for a fight.” Those who do defy Dizdarevic find a tough adversary. Beijing’s most popular luxury hotel, the Grand Hyatt, just two blocks from Tiananmen Square, negotiated for months with Jet Set back in 2005 over a block of roughly 100 rooms and suites, says Christopher Koehler, the hotel’s general manager. After six months of talks, Dizdarevic walked away. But Koehler says he has no regrets. “They’re sharks,” Koehler says. “They came in very early and tried to scare us that we wouldn’t fill the hotel for all 18 days.” During the negotiations, Dizdarevic invited Koehler to attend the Turin Games as his guest, but the New Jersey native declined. “I didn’t think it was appropriate to be in his pocket,” Koeh­ler says. The manager says his hotel will earn more from the Games than what Jet Set had offered. “Why hand over product to somebody else who’s just going to profit from your work?” Koehler asks. Dizdarevic, for his part, says the Grand Hyatt is slashing prices to fill rooms during the Games, just as he predicted it would. He says Jet Set recently turned down single rooms going for 50 percent less than what the hotel was asking in 2005. “ ‘You’re three years too late,’ I told them,” Dizdarevic says. (Koehler counters that he’s comfortable that the Grand Hyatt will earn a healthy profit from the Games.) It’s perhaps no paradox that some of Dizdarevic’s corporate clients praise him with the same intensity as his detractors criticize him. “Sead really understands the Olympics. He’s also a great negotiator,” says Deirdre Latour, who runs the Olympic-­guest program for General Electric, a worldwide Olympic sponsor. This summer, G.E.’s corporate and business units are sending 2,000 guests to Beijing with Jet Set. “How do you structure a day for customers that includes Olympic events, tourist sites, meals, transportation, drop-offs, signage in multiple languages? Sead gets it done,” Latour says. Raised in a secular Muslim family north of Sarajevo, Dizdarevic left the air force academy at age 20 and moved to West Germany to play club soccer. In 1972, he went on a shopping junket to New York and stayed. “I thought, What a great country. No one asks my religion,” he says. Following a stint as an airline mechanic in Newark, New Jersey, he opened a travel agency for Yugoslav immigrants on Staten Island. The business mushroomed, drawing Yugoslavs of every ethnic stripe. “Bosnians were considered neutral. We worked with everyone,” Dizdarevic says. It was that very agency through which Dizdarevic—aided by a check he delivered to the right people in what was then Yugoslavia—won the right to become the travel and ticket agent for the Sarajevo Games, which launched his Olympic career. He married a Croatian-American Catholic. They have two sons and a daughter.  Prosperity and the stress that comes with it have brought him a shock of white hair and crow’s-feet that nearly engulf his eyes when he laughs, which is often. Though diminutive, Dizdarevic still moves with athletic grace, which he puts to good use during the occasional ski trips that the demands of his Olympic-­concierge life still allow. His real love, though, is hunting: He’s a little guy with big guns and the trophies to prove he knows how to shoot them. At Jet Set’s headquarters, in an old mansion in Somerset County, New Jersey, a pair of giant elephant tusks frame one end of the main hall; a seven-foot-tall mounted Canadian polar bear stands guard at the other. But Dizdarevic is proudest of the stuffed African lion and leopard that adorn his home. Beijing is his richest prey ever. It took three years of coddling and cajoling to reach a sponsorship deal with China’s Olympic leaders. “We had to educate them,” he says. “At first, the Chinese said, ‘Okay, the price is $500 a room, plus tickets.’ We said, ‘You need to talk thousands of room nights, multiple hotels, 100 percent occupancy, sponsorship rights, staff costs. What if you sell only 60 percent? How do you factor all that in?’ We explained to them, ‘The first and last waves of guests, for the opening and closing ceremonies, you can mark up 100 percent. But you can’t mark up the middle wave.’ They thought you could just book the Olympics like a hotel.” Dizdarevic worried that Chinese competitors would undercut Jet Set by selling Olympic packages overseas. So he paid the Beijing organizers to become the official hospitality operator for China’s domestic market too. The sponsorship deal had to be approved by China’s politburo, Dizdarevic says. His key Chinese associate is a functionary named Li Qibin. Li is general manager of China’s largest travel company, government-­owned C.I.T.S. Beijing, which procured most of Jet Set’s hotels, restaurants, vehicles, and local workers. To an Italian lunch with Dizdarevic in Beijing, Li brings his English-speaking assistant; Lu Jun, the head of the C.I.T.S. department devoted to English-speaking clients; Lu’s English-speaking assistant; and Lu’s assistant’s assistant. None of them speaks English very well. Li, the boss, speaks French. Dizdarevic broaches a sensitive subject. “As you know, Jet Set’s guests are special,” he begins. More than 11,000 of them will tour the Great Wall, Forbidden City, and Temple of Heaven during the Games, and they don’t like waiting in lines, Dizdarevic explains. “Can we have special entrances for Olympic-family V.I.P.’s?” he asks. “We’ll try our best,” responds Lu. Unsatisfied, Dizdarevic homes in on the young manager, who will oversee 16 C.I.T.S. supervisors assigned to Jet Set for the Games. “Is it possible for you to spend a week with us training in the U.S.?” Dizdarevic asks Lu. The invitation, translated into Chinese, whirs around the table. “Really? Not joking?” Lu erupts. “Okay, if my boss says it’s okay.” Across the table, the C.I.T.S. chief, himself one of seven Chinese officials whom Dizdarevic hosted at the Turin Games in 2006, nods his approval. Li says he became a big supporter of Jet Set while visiting Dizdarevic’s V.I.P. operation as his guest in Turin. Several foreign travel companies came through Beijing seeking Olympic tie-ins, Li says, but Jet Set was the only one to offer yearlong training in English and “how to treat the V.I.P.’s.” Li waves away the question of whether V.I.P.-ism clashes with Communism, noting that the Chinese government stands solidly behind the country’s economic rise. “I never imagined that Chinese could afford washing machines and Walkmans. But now many Chinese have them. I have 300 employees in my agency, and more than 100 have cars. The government is giving bonheur for the majority.”  Li’s firm interviewed 3,000 university students to select 800 for training at Jet Set Academy as guides and protocol officers. The students are paid to spend three hours a week in the classroom learning about Western culture and etiquette and Olympic history, with one overarching goal decreed by Dizdarevic: “To get them to think outside the box,” says Elizabeth Ganschow, the veteran China hand who runs Jet Set Academy. During one evening class, a trainee asks if Westerners have any special needs that “Orientals” don’t. “They want downtime, to be left alone,” answers Jay Liu, a program manager at Jet Set. Another young woman asks what to say if asked about sensitive topics like Taiwan. First, Liu tells her, take the guest aside and speak privately. “My answer would be, ‘I think Taiwan’s part of China, like a younger brother. How can part of the family leave the family?’ ” Liu says. “Don’t be too detailed. Keep it ambiguous.” Before wrapping up in Beijing, Dizdarevic stops by the Sofitel to see if the manager has come to his senses. This time, the Jet Set boss tells the Frenchman that his groups will eat breakfast in the main dining room—a nightmare scenario for a hotel planning to run at 100 percent occupancy. “What if there are no seats?” the manager asks. “People will get up earlier the next time,” Dizdarevic says. A few days later, back in New Jersey, Dizdarevic gets word that the Sofitel has slashed its quote in half for breakfast and is throwing in use of the ballroom for free. “If I wanted to play a game with him, I could squeeze him to death,” Dizdarevic says. “I charge a lot of money too, but I have never charged anyone three or four times my cost.” The Highs and Lows of Attending the Olympics Two ways to go: Jet Set’s corporate packages versus tourist class Deluxe Corporate Hospitality Program 18 days for up to 30 people. 15 rooms or suites at the five-star Sofitel Wanda hotel, Ritz Carlton, or JW Marriott. V.I.P. tickets of your choice for each occupant of each room (two events per day); could include tickets for the opening or closing ceremonies, hockey finals, basketball finals, or other premium events. For every 15 rooms, one deluxe bus or limousine for transportation to and from the events. Reserved dining at premium restaurants, including those at Commune by the Great Wall Kempinski hotel Guided tours of the Great Wall, Forbidden City, and Temple of Heaven. Daily breakfast in hotel ballroom. $2 million to $3 million Provider: Jet Set Sports, Far Hills, New Jersey A Typical Package for the "Civilian" Traveler Five days’ accommodations at the Tianlun Songhe Hotel. Tickets to two Level-1 events and two Level-2 events, like boxing or rowing (surcharges may apply) Round-trip transportation to and from events. Guided group tour of Beijing’s tourist attractions with English-speaking guides. Access to the trip provider’s Olympic Green hospitality area with English-speaking guides and concierges Optional upgrades to Level-1 tickets. Daily breakfast. $6,250 per person Provider: Roadtrips Inc., Winnipeg, Manitoba, Canada Note: Prices are for double occupancy and do not include airfare.—Jessica Liebman Related LinksAre the Olympics Worth It?Strong Interest in Summer Olympics Spurs Vibrant Ad SalesChina's Big Drain

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