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For Business, Corporate Travel & Meeting Buyers & Arrangers

Decline in airline choice and discount opportunities for buyers, report finds

A lack of choice in the airline industry has reduced corporate travel options and discount opportunities for travel managers, according to a report published today by Egencia.

The study, Corporate Travel in the Consolidated Skies, showed the number of carriers has declined in the past 20 years and the load factor (number of seats occupied per plane) has risen from 70 per cent in 1990 to 85 per cent in 2013.

It said this means there are fewer flight options and the remaining carriers do not have the same incentives to offer corporate discounts to attract the, often last-minute, business traveller.

The study from Egencia, which is the business travel arm of Expedia, analysed how travel buyers manage airline consolidation to save money and travellers time in the booking process. It also highlighted how discounts available to corporations can drive incremental share in competitive markets.

The study showed airlines are being more selective about signing or maintaining preferred-carrier contracts, and if companies fail to deliver the load share they promised, airlines are cancelling contracts, sometimes as early as 90 days after being signed.

Egencia's senior VP of the Americas Mark Hollyhead said to maximise air contract discounts travel managers must make travellers aware of their preferred carriers and ensure those air partners "appear at the top of the page".

"We can expect carriers to be increasingly dilligent about managing contracts as airline consolidation continues," said Hollyhead. "So closely monitoring the use of preferred vendors is key for all travel managers."

The study found 67 per cent of all travellers book their flights from choices found on the first page of the booking tool.

Egencia said if your TMC is not sorting your company’s air preferences effectively, travellers can easily miss the best deals and the company could lose saving opportunities. This becomes more prevalent when the itineraries are international and the choices substantially complex.

"The fundamentals of travel management haven't changed but the ability to manage air preferences should be,” said Hollyhead.

“A 21st century TMC should be able to attractively display clients’ preferred choices within the booking tool, with integrated approvals and real-time reporting on compliance.

"The ability to control ‘sort order display’ should be in the hands of the travel manager to act quickly and adjust when necessary.”

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