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“Strategic Carrier” Concept Gains Traction In New Report On Airline Agreements According to ACTE…”

August 30, 2016 Business News No Comments Print Print Email Email

A new study, The Evolution Of Airline Agreements, released by the Association of Corporate Travel Executives shows the concept of the “strategic airline” is on the rise among business travel managers and will factor into carrier negotiation over the next two years. Presented to the industry at ACTE’s Beijing global travel conference on 25 August, the report showed that while 89 percent of survey respondents are satisfied with current airline agreements, 81 percent would be focusing their energies on carriers deemed crucial to the corporate objective. The mechanism for those negotiations is well-established.

““Seventy-seven percent of respondent travel managers conduct regularly scheduled meetings with their carriers, and that same percentage cites these meetings lead to action” said ACTE President Kurt Knackstedt. “Strategic relationships develop from open and honest dialogue between parties, and in well-managed corporate programs we see a growing understanding of this approach to air contracting which is very encouraging.”

The report indicates a third of respondents now rely on the expertise of third party specialists to unlock discounts through data analytics. The number of travel managers rating traveller comfort as a significant part of an airline agreement held steady at 52 percent, but this is expected to increase over the next two years as traveler centricity drives higher savings through compliance.

The report illustrates how the approach to airline agreements differs by region. For example:

  • Corporations tend to maintain multiple airline agreements: globally, most (67 percent) have between two and ten airline agreements. But there are regional variances: over a third (35 percent) of travel buyers in the Middle East maintain just one.
  •  Half (50 percent) operate a mixed portfolio of agreements featuring joint ventures, alliances and individual carriers. While around only a quarter of corporations in the Americas, Europe and APAC work with one carrier, 40 percent of travel buyers in the Middle East work with just one airline partner.

The report also explores the impact of ancillary merchandising on the cost of air travel. Despite the anticipated trend of marketing directly to business travelers, the report claims most travellers cannot use the online booking tool “to buy fee-based extras that enhance traveller comfort, such as fast track passes for airport security or lounge access.” This is not expected to change anytime soon.

Two hundred-twelve professionals responsible for running managed travel in their corporations took part in an airline agreement survey run by ACTE between 4 – 22 July 2016, which became the basis of this report. Ninety-one percent of respondents were corporate travel managers with mature programmes.  Forty-six percent of respondents are located in the Americas, with 36 percent in the EMEA and 19 percent in the APAC regions.

ACTE’s Executive Director Greeley Koch acknowledged the generous support of Qatar Airways in the research and development of The Evolution Of Airline Agreements. To view the document on its entirety, please click here.

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