Most frequent travelers have a relationship with an airline: their preferred carrier, favored for its perks, points, or perceived reliability. A corporation consists of many individuals acting as one interest – though it may not be to that interest when each traveler chooses his or her own personally-preferred airline.
For companies without their own airline partnership, business flights are likely to be each travelers’ preference or, depending on travel policy strictness, the lowest logical flight on that routing. Either way, the assortment of airlines flown support no company goal or savings; either way, without an airline partnership, money is left on the table.
KesselRun Consulting has been negotiating and maintaining airline partnerships for clients for 15 years. From our experience, let us offer you some free advice.
Top 5 Things to Consider When Choosing an Airline Partnership
1. Follow the Money
No airline partnership should be established without first undertaking a thorough air analysis. This analysis should be twofold: existing spend across all airlines should be reviewed, and discounts should be benchmarked.
If your spend tips strongly toward one airline, beginning an airline partnership with their competitor will be an uphill battle. Building an airline partnership on the strongest existing ground is likely to have more immediate, and monetary, impact. As well, it improves your likelihood of fulfilling contract requirements.
Air benchmarking is also key. Your discounts should be compared against your prior average spend on flight segments, and, whenever possible, to best-in-class discounts offered for comparably-sized companies. If in need of industry-wide comparisons, keep in mind KesselRun has the power of the largest benchmarking database available at our fingertips.
Even when the percentage discount per route may appear minimal, a correctly-chosen, built, and supported airline partnership can add up to vast savings.
2. Location, Location, Location
Where do you fly? Some airlines are synonymous with a certain city. Based on your company headquarters alone, you may already have a natural airline partner in the wings.
Each airline has its own hubs and regions of strength, so consider which airline offers the most options, routes, and nonstops in your own dominant areas.For global or globally-expanding companies, remember that an international Point of Sale, or particularly heavily-flown international routing, can support and even drive an airline partnership that may not seem as likely on domestic alone.
As in all business, it’s also important to keep an eye on the future — where the respective airlines are headed next, and where your company will need to be.
3. Learn Where Loyalties Lie
How many of your business travelers are frequent flyers? While new GDPR guidelines limit access to frequent flyer data, working with your Travel Management Company, you can still establish how many travelers have preferred numbers entered in their profiles, and for which reward programs.
If the majority of your travelers gravitate toward one preferred, and you encourage another, you are more likely to wrestle with program compliance. As with following spend, building on the strongest existing ties gives your airline partnership a running start.
Once an agreement is in place, looking at travelers for status matches, which your airline representative can often provide, can greatly supporting your airline partnership. Identifying and shifting even one high-volume traveler on key routes via status match can significantly impact contract fulfillment.
4. Choose Your Alliance
Taking every discount possible sounds great, in theory. In actuality, contracting too many airlines is a rapid way to ruin a good deal.
Very few companies have enough volume to sustain contracts with all three major alliances. When spread too thin, discounts drop; partnerships end. Based on spend, location, and traveler preferences, decisions need to be made. Elect one, or two, alliances to support, perhaps supporting with a low-cost or more regional carrier contract.
Airline contract terms typically last one to three years, which allows room for choices to change. An airline partnership is not just a one-time decision, but, as with any long-term relationship, one that has to be recommitted to – and only when it continues working for both parties.
5. Support Your Partner
As with any relationship — an airline partnership also requires maintenance.
At times, your travel manager may need to dig into why a particular route isn’t taking, which could be because a flight option doesn’t meet travelers’ time of day or the discount in that location not being competitively low enough. Communication with your airline representative, who can often support initiatives to improve, is your greatest tool in keeping your airline partnership running smoothly.
How KesselRun Corporate Travel Solutions Can Help
If still unsure of where to begin your airline partnership, KesselRun can step into the process at any point. We offer air data analysis and benchmarking, run airline RFPs and contract negotiation, and even provide travel management, keeping the airline partnership working for your company, your travelers, and your airline partner, day to day, year to year.
To engage with KesselRun for corporate travel consulting or other services, contact us online today.