Over the past two decades, we have seen considerable consolidation in air travel. In the last ten years alone, mega-mergers reduced nine large U.S. airlines to four — American, United, Delta and Southwest. Meanwhile, joint ventures, which add pricing power to consolidation, have expanded from the Atlantic to the Pacific.
In a consolidated air industry, it is becoming increasingly difficult to manage and balance the number of preferred carriers, savings and goal commitments your organization can make when working with airline partners. To help navigate these airline agreements – which require significantly more time, cost and effort – we have prepared an article outlining the scenarios, challenges and opportunities in covering your respective global travel footprints.
Some highlights from the article and outline of the advantages and disadvantages of a consolidated program:
Advantages of a consolidated program:
- Fewer resources and less time are needed to successfully manage suppliers; working with a select few frees up valuable resources and time to focus on managing policy, traveler behavior, and supplier content
- Allows for balancing and meeting contractual goals
- Availability of airline soft dollar funds to encourage spend shift
- Opportunity to negotiate greater discounted spend coverage as goals are met
Disadvantages of a consolidated program:
- Fewer traveler choices
- Most airlines do not compensate for over-performance
- Disparity of product proposition and value
- Not all spend is covered by discounts
The article provides expert tips and recommendations from our Global Business Consulting Team – and concludes that consolidating the number of preferred carriers may be a natural fit, provided there is clear value and return to your company’s air travel program.
To read the full article and to receive the recommendations shared, please click here, or to receive solutions and support on every facet of your travel program, please contact [email protected] to schedule a complimentary consultation with one of our subject matter experts.