Get Transparency on Airline Pricing with the Air Fare Predictor
Author: Julien Etchanchu, Consulting Manager, Advito
Sometimes negotiating air travel rates for your corporate travel program is like stepping into the unknown. Fares seem to change randomly, and it’s hard to establish what fares are going to be available when. That’s a huge problem when you’re trying to source the best deals. Luckily, there is a way to improve transparency on air travel rates. It’s an advanced analytics tool called the Air Fare Predictor, and it solves some key issues for travel managers when negotiating rates.
The Trouble with Airline Pricing
One of the problems with airline pricing is it’s not very transparent. It’s hard to tell what travel on a given route is going to cost, and there’s no guarantee it’ll be the same rate the next time you book. As a consumer, you’ve probably experienced air travel prices increasing drastically for no discernible reason. Once you think you’ve found a great fare, taxes and surcharges can drive the price up even more.
It’s the same when you’re trying to find rates as a travel manager. You might have spent months negotiating a great deal on a particular fare class, only to find that class isn’t available when your travelers are ready to book.
Inside the Air Fare Predictor
Data is at the heart of the Air Fare Predictor. Advito collects publicly available airline prices on a daily basis on more than 450 routes, which represents 60 million transactions per year. This includes information on airport and other taxes, and fuel surcharges, so it makes the overall cost of any flight totally transparent.
The Air Fare Predictor is moving into predictive analysis – shopping six months into the future. The predictor’s shopping behavior mimics the business traveler – searching by day of week and length of stay – making the data relevant to Travel Managers.
The tool also has information on booking class availability for each airline, so you know exactly what’s available when. And, importantly, the tool creates constantly updated pricing curves, so you can see when prices are likely to rise or fall. This helps you identify the ideal time periods for booking travel. Here’s how that works.
Say your travelers are going from Atlanta to Frankfurt. The pricing curve will show you that the price stays stable from several months out until 8 or 9 weeks before the date of travel. After that, the price rises sharply. So, you’ll advise travelers that 8 weeks before travel is the best time to book a flight. Any earlier, and you might need to incur cancellation charges if things change. Any later, and you risk paying much more for travel. The same approach applies on domestic routes, though booking windows are generally much shorter.
The Air Fare Predictor includes a range of filtering tools, so you can change displayed data according airline, time period, booking class, carrier, price, route and more. This makes it easy for you to focus on the most important data for your program.
Three Benefits for Travel Managers
Using the Air Fare Predictor brings three major benefits to travel managers: transparency on pricing, better information to influence traveler behavior, and reduced spend.
With the improved transparency available via the Air Fare Predictor, travel managers no longer have to negotiate blindly. Smart negotiation is about getting deals on what’s actually available. With this tool, you can easily see when a particular booking class has low availability, so you don’t waste your time trying to get a deal.
And if you know the fuel surcharge is higher on one flight than another, even though the net price is lower, you can factor this in when making a decision about the best carrier to use.
You can also work out when prices are likely to increase on certain routes, and you can compare total costs for the same route on different airlines. Match this with when you know your travelers are most likely to use particular routes, and it puts you in the driving seat for air travel sourcing.
Influencing Traveler Behavior
This information also helps when communicating with travelers about preferred options and booking windows. For example, if you know the most and least expensive days to fly on a particular route, you can steer travelers towards the most affordable option.
Similarly, if you know that taking a flight that’s not direct will save money, you can steer some travelers to that option. There are several Traveler Engagement strategies that you can use to keep travelers informed based on the data that comes from the Air Fare Predictor. You can leverage these insights to develop messaging to integrate directly into your online booking tool – or create campaigns to go to your travelers through a diverse channel mix and influence their booking decisions based on your data.
For most corporate travel programs, air travel is the biggest expense. The Air Fare Predictor can help reduce that spend and drive savings. If you use the Air Fare Predictor consistently, you’ll be able to pick the most cost-effective options and communicate those options to your travelers, leading to reduced spend over the course of the year. It will also give you more leverage in negotiations with suppliers.
The bottom line is: with more transparency on airline pricing based on constantly updated data, you’ll be able to run a more cost-effective air travel program. To learn more about the Air Fare Predictor, contact us today.