Airline RFP Mysteries 1, 2, and 3

Last week I delivered an NBTA training course to Delta Air Lines.  The workshop was geared to Delta’s global corporate sales team, and naturally we had some good give and take about trends in airline RFPs.  Three things puzzled me, and so I throw these mysteries out to you, valued reader, for your insights.

Mystery 1: Which non-price, non-schedule questions really matter? Like RFPs in most other categories, airline RFPs have lots of questions about things other than price and schedule. Lots of topics come to mind – on-time stats, fleet age, onboard wi-fi, upgrade policies, corporate social responsibility, etc.

But when push comes to shove and the buyer is deciding between two airlines for one spot in its preferred supplier program, which non-price, non-schedule questions are used to break a  tie?  I’m looking for clear examples of a buyer valuing something other than price and schedule to award its business.  If the answers to these RFP questions aren’t being used, shouldn’t the RFPs do away with irrelevant questions?

Mystery 2: How can you talk about discounts but not share goals? Apparently a lot of buyers are using an RFP format that asks airlines to discuss discounts without discussing their corresponding share goals at the same time.  That’s puzzling. It’s like asking about a volume discount without mentioning the volume – academically interesting, but not yet practical.  If you buyers are doing this, what’s your rationale?

Mystery 3: Preferred fares, or lowest logical fares? Many buyers have a travel policy requiring the traveler to use the lowest logical fare.  Hopefully, that fare is from a preferred carrier.  But if not, and if there is an unmet share goal in the market, what’s the right answer for the buyer?How do you buyers balance the short-term savings against the risk of not meeting a share goal – and potentially losing your contract’s discount?

Feel free to post replies here, or if you’d like to remain anonymous, send your thoughts offline to me at scott.gillespie2008@gmail.com.

Want articles like these delivered to you by e-mail?  Sign up here.  It’s free, and you can unsubscribe at any time.

This entry was posted in Airlines, Travel Procurement, Travel Suppliers and tagged , , , , , , , , . Bookmark the permalink.

2 Responses to Airline RFP Mysteries 1, 2, and 3

  1. Pingback: Tweets that mention Airline RFP Mysteries 1, 2, and 3 | Gillespie's Guide to Travel+Procurement -- Topsy.com

  2. Jakob says:

    Looking at this from the travel agency perspective of negotiating deals with airlines, Mystery 3 partially answers M2… If the discount is sweet enough, then buyer wont feel compelled to go to the competition. The highly competitive fare market changes at a dynamic rate that if share goal on one carrier is not met, that just means that carrier is not worth signing on again anyway.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s