Air Sourcing Moves Out of the Slow Lane

The big bottleneck in airline sourcing projects is the time and cost of entering detailed airline contract terms.  That will soon change for the better.

Fayrnet, a product of Volaro, automates the loading of airline contracts into GDSs.

In speaking today with Patrick Healy, Volaro’s Director of Sales and Distribution, I discovered that this tool could  – and should – be easily adapted to handling corporate contracts and proposals from airlines.

Healy says it handles Category 25 and 35 fares (discounts off published fares, and fixed, aka flat, lane or zone fares, respectively).  The demo I saw quickly converted a typical Excel-based airline contract for dozens of fixed fares

Airline Sourcing One-Day Workshops

Any travel buyer interested in learning the most powerful and innovative methods for sourcing airlines should attend one of my workshops:

Airline Sourcing, Nov. 14th in Chicago

Airline Sourcing, Dec. 10th in Dallas

I’ll cover the basics, but then quickly head into deeper water – where buyers will learn how to maximize their leverage, regardless of their air spend. Key topics include:

• Scenario modeling
• Risk-reward mapping
• Why discount benchmarking is useless, and what’s better
• Discovering the gap between the offered and maximum rational discount
• Finding the 20% of your markets that will drive 80% of your savings
• Optimizing between trip cost and trip friction
• Predicting the impact of the AA-US merger on your 2014 air budget
• Procurement’s best and worst roles

These workshops are open to anyone, including airline sales managers.  Register via the GBTA website.

Everyone benefits from having a sophisticated, fact-based discussion about optimizing airline discounts. I look forward to seeing many of you there.

1-Day Air Sourcing Workshop, Apr. 14th in Atlanta

The first-ever one-day workshop devoted to sourcing airlines was a big success (see results here), so we’re doing it again.  Matthew Patterson and I will lead the session on April 14th in Atlanta.  (Sold already? Register here.) The agenda is tailor-made to those folks wanting a deep understanding of these key topics:

• How airlines price corporate accounts – what really matters
• Understanding your true leverage – quantifying Buyer Power
• What’s better than benchmarking – and why?
• Bid analysis – or a best guess?
• Future fare mix – why your discounts will vary, and maybe by a lot
• The solution to discounts tied to unpredictable inventory
• Alliance bids – good, bad or just ugly?
• Scenario modeling 101
• Spotting – and avoiding – unachievable goals
• What to do about ancillary fees

Focusing on Airfare Fuel Surcharges

With all the hue and cry for transparent pricing, buyers need to look more closely at fuel surcharges.

For starters, spending on fuel surcharges probably dwarfs ancillary fees.  Why? Unlike ancillary fees, surcharges are not optional. They apply to every passenger who buys a ticket with a surcharge filed as part of the fare.  Quite different from those who may elect to pay for a checked bag or an aisle seat.

Now for the salt in the buyer’s wound – corporate discounts

Buyers Right to be Crabby About LH’s Demands

Lufthansa (LH) has drawn a deep line in the corporate contracting sand this year. It is demanding financial clawbacks and access to detailed, perhaps unprecedented, corporate travel data in return for providing corporate discounted fares. More on this here.

Many buyers, big and small, take advantage of airlines by getting discounted airfares before ever delivering the promised volume or market shares. If those volumes are not delivered, the airline is the loser

Air Sourcing Academy a Big Hit

The first-ever one-day workshop on airline sourcing was a big success!  About 70 delegates worked their way through the key success factors for sourcing this important spend category. NBTA‘s post-event survey measured two key factors:

The change in the level of understanding of airline sourcing (definitely improved, above), and the overall satisfaction with the event (quite high, below).

1-Day Air Sourcing Workshop, Dec. 14

This is the first-ever one-day workshop devoted to sourcing airlines.  Matthew Patterson and I will lead the session on Dec. 14th in Chicago.  (Sold already? Register here.) The agenda is tailor-made to those folks wanting a deep understanding of these key topics:

• How airlines price corporate accounts – what really matters
• Understanding your true leverage – quantifying Buyer Power
• What’s better than benchmarking – and why?

Travel Procurement Workshop at NBTA 2010

Yesterday I led a full-day workshop on travel procurement at NBTA’s annual conference.  We had a terrific group of about fifty folks participate.  About two-thirds came from travel backgrounds, and about a third came from the procurement side.  Lots of good interaction throughout the day.

Here are the slides that I used during the workshop.

Why Ancillary Revenues Don’t Much Matter

Let’s cut to the nub of this issue.  No one will  ever know for sure if ancillary revenues make airlines more profitable.  There are just too many moving parts in an airline’s  revenue stream.  Sure, airlines may report an extra billion dollars in ancillary revenue (AR, from here on) – but what did fares do?

If fares went down, then maybe the extra AR revenue

Airlines and Hotels: Two Sides of the Same Coin?

When it comes to buying airlines and hotels, there are some big differences.

That may not be the case in the near future.  I think we’re beginning to see a shift – the beginning of a shift – away from the hotel model of pricing and contracting.

Let’s look first at some key differences:

break line