Sourcing Strategies

The sourcing landscape continually changes; five strategies to keep your program up-to-date.

Identify what value means for your program As airline pricing and distribution changes, airline contracting is changing too. We’re seeing the introduction of metrics and value drives beyond discount in return for share and revenue commitments including Online Booking Tool (OBT) preferencing and loyalty targets. As airlines seek to move the conversation away from price, you need to decide what’s important to you. What do want in a bundle? Are you able and willing to drive loyalty and potentially lock your program to a supplier long term?

Set the future direction of your program Today's airline retailing and distribution environment is in flux and it can be difficult to compare and aggregate offers from different suppliers. When you enter negotiations, be clear about what you want to get from the airline and what you can manage in your program. You are the customer – use your influence to shape the airline offer to your own needs, current and future.

Have the data at your fingertips Faced by operating cost increases, airlines are adopting tougher stances in negotiations. Discounts are scarcer than they've been in previous years, fixed fares are becoming a rarity, and airlines are getting stricter about matching savings to contract spend and performance. To get a better deal, corporates need to show the airline that they are prepared to be a partner, not just a customer. Be ready to demonstrate to the airline that you are keeping your side of the bargain; for example, by fulfilling your volume commitments. Always go into airline conversations armed with the relevant data.

The value of loyalty Airlines use their loyalty programs to win your traveler’s attention. While we know that loyalty can bring traveler experience benefits, we’re increasingly seeing airlines pushing for loyalty-based targets in negotiations including advertising banners on your OBT or incentives based on mobile app downloads. Airlines may present loyalty-based targets as a non-negotiable if you want to get discounts. Explore your options for loyalty programs and identify how they can enhance the traveler experience while supporting your goals. Then, engage your travelers – communicate your chosen loyalty options clearly and frequently to travelers to cut through noise and drive compliance.

Focus on total spend Carrier-imposed charges are assuming new shapes; environmental cost surcharges now join fuel and Global Distribution System (GDS) surcharges as extra cost items. Insist your airline partners take account of the total price you pay for a ticket; the airline should acknowledge the value of every dollar you spend with them.

The sourcing landscape evolves all the time. To keep ahead of the change, we recommend sourcing and ongoing program management approaches. Get in touch to learn more.

Sourcing a smaller air program

Considerations for companies with smaller travel programs.

If you can’t get a rate, get on the airline programs Smaller travel programs can struggle to secure a negotiated rate with their preferred airlines. If this is your experience, explore your options; start with assessing your contract and discount coverage, and consider how a pre-negotiated rate (such as Amex GBT’s Preferred Extras) could support your goals. Look at the airline’s corporate rate program and join the loyalty program. Membership can bring significant benefits including loyalty points, awarded to the company, that you can use for the benefit of your organization. If you do join the loyalty program, it’s important to continue to book air travel through your Travel Management Company (TMC) to fulfill duty of care obligations. Take advantage of your TMC Some smaller programs may not have a person assigned to maintaining and configuring the company’s OBT. This can lead to travel budget leakage and low compliance. Your TMC can help you set up you OBT to flag the best options for travelers, signpost those within policy, and detract employees from booking the highest fare; this will help boost compliance and achieve savings. Set up an approval process for expensive international travel. Define clear guidelines, keep your policy simple, and communicate it to employees regularly. Your TMC can also advise on the best way to integrate travel & entertainment expense management with your travel program. Hotel and air costs might be readily visible, but without reporting on meals and taxis, it’s difficult to understand the true total cost of a business trip. Keep it simple Without a dedicated team managing a travel program, it can be difficult to maintain policy and track compliance. To make your program easier to manage, even with few resources, simplify your policy and processes so that employees can comply without needing support. Talk to your TMC about how they can help you design simpler policy and processes.

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