Intense competition has always been a part of commercial aviation. The first airlines competed to win government contracts that would allow them to deliver the post. Once passenger travel caught on, airlines competed to offer the most comfort and, after deregulation, the lowest fares.
Competition shaped the air industry we know today, and it’s essential for a healthy air program as well. A wave of consolidation over the last 15 years has changed the way airlines compete. It has also limited choices for travellers and perceived leverage for buyers, particularly at the individual route level.
Travel managers may wonder if they can still obtain compelling discounts for their air programs. We believe that you can put yourself in the pilot’s seat, provided that you know your objectives and your data. Egencia has provided a position paper to help you learn more about the market dynamics of airline consolidation around the world.
We have found that airlines are still willing to sit down at the negotiating table, but it’s more important than ever for travel managers to go in with their eyes open. The cost-efficiency of an air program depends on many factors, not exclusively on contracts. That’s why best-buy policies have become more and more popular. Before you negotiate, there are four steps from which every travel manager, and every air program, can benefit:
- Articulate goals for where you want your air program to go.
- Evaluate current traveller needs in relation to your air contracts.
- Measure traveller satisfaction levels with your preferred carriers.
- Analyse your travel data for leverage in future carrier negotiations.