David Frangeul, Senior Director, Global Air and Ground Practices
As business travel continues to ramp up, traveler needs are changing and your strategy needs to adapt accordingly.
For example, sustainability and traveler well-being are now more critical than ever before, and cost control remains a top focus as a result of rising inflation.
With many corporate air programs still running on extended airline contracts negotiated prior to the pandemic, now is the time for you to take a hard look at whether your air program is still meeting your needs. Does your pricing structure support your growing travel activity in a reduced supply environment? Is your program aligning with companywide sustainability initiatives? Are you taking traveler satisfaction into consideration?
Revamping your air program starts with a full air program assessment
Doing a full assessment of your current air program is the easiest way to determine how you should modify your strategy and build a robust air program in 2023.
To start, you must assess your current negotiated routes. This will help you identify where there are opportunities to increase discount coverage. Take the time to evaluate potential challenges or opportunities, and determine where you’ll have strong negotiation power with airlines.
Then, you need to develop a strategy for how you will approach the airlines. Keep in mind that at the moment it is uncommon to see many airlines boosting offers since most travel activity is still below 2019 levels. Additionally, the return on investment on sourcing projects has been significantly reduced due to airline reluctance to match pre-covid pricing proposals (lower discounts, limited lane fares, etc.) This means it’s time to get strategic and make sure you are targeting opportunities where you have the leverage to get the optimal discount coverage with each airline in each market.
Top three considerations during your air program assessment
- Focus on fare increases and forecasting – The supply shortage (less frequencies, less seats) has had a significant impact on airfares with air travel ramping back up. Monitoring airfare trends and booking class availability is critical prior to negotiating with carriers.
- Focus on sustainability – Companies have set aggressive corporate sustainability goals and travel can play a big part in helping achieve these goals. Consider how sustainable your preferred airlines are. If they don’t stack up, now is a great time to reevaluate which airlines should be part of your program. One way to determine an airlines environmental performance is by looking at the quality of their airline fleet as newer aircraft emit less CO2 than older models.
- Focus on traveler well-being – It’s important to balance sustainability initiatives with employee wellness considering criteria like cabin class, jetlag factor, flight duration and layovers, and risk level of the destination. When planning for negotiations with carriers, don’t forget to include value-add services related to traveler experience. Think about key items like airport lounge access, frequent flyer matching or status upgrades, limo services, upgrades inflight or corporate recognition program.
Air travel recovery is well underway, but a lot has changed. It’s time to initiate a complete check-up of your air program as corporate travelers get back on the road. This will help you build a strong air program that drives optimal savings, meet sustainability goals, and ensures traveler satisfaction. Need help putting together your air program assessment? Contact our team today!