Going Strategic


In a newly released study, the Association of Corporate Travel Executives (ACTE) reports that the concept of the “strategic airline” is on the rise among business travel managers and will be a factor in air carrier negotiations over the next two years.

The Evolution of Airline Agreements found that while 89% of survey respondents were satisfied with current airline agreements, 81% said they would be focusing their energies on carriers deemed crucial to the corporate objective. The mechanism for those negotiations is well-established.

ACTE President, Kurt Knackstedt observed that: “Seventy-seven percent of respondent travel managers conduct regularly scheduled meetings with their carriers, and that same percentage cites these meetings lead to action.”

Knackstedt continued: “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.”

ACTE’s report found that 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%, but this is expected to increase over the next two years as traveller centricity drives higher savings through compliance.

As well, the report illustrates how the approach to airline agreements differs by region. For example:
corporations tend to maintain multiple airline agreements: globally, most (67%) have between two and 10 airline agreements.

But there are regional variances: over a third (35%) of travel buyers in the Middle East maintain just one.

And half (50%) 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% 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 travellers, 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.