Open the door to open skies
And unlock more power to save
Air travel has had a bumpy ride of late. While corporates in entertainment and sport have ruthlessly searched for the cheapest fares, government regulations have forced more airlines to become more competitive. But has this 'opening of the skies' actually made airlines open for negotiation on price?
How grey skies became blue
In the past, we've seen the major airlines owned and structured by their respective governments. They've adopted the status as national 'flag carriers' and blissfully held the majority of their national market share. Air fares have been driven on a market-by-market basis, based on what each national market has been prepared to pay.
We've also seen the major airlines being savvy in micro managing their pricing on a route-by-route basis. On less competitive routes the pricing has remained buoyant. And on the more competitive routes, where there's a mix of major carriers and their low cost carrier (LCC) off-shoots, there has been some pricing competition. By the same token, some of the major airlines have pulled out of the less profitable routes altogether and left them to their LCC off-shoots.
In both cases, the clouds have gathered over any opportunities for your business to snare the best rates.
Fortunately more governments have stepped in over recent years to deregulate the aviation industry in many parts of the world. This has not only helped balance the scales, but also helped clean up airline management structures and systems that were somewhat tardy.
Deregulation has opened up competition for airlines in new markets. National carriers have become more aggressive in their pricing tactics outside their home markets, while non government-owned carriers have boosted choice and lowered fares. This in turn has put the spotlight on pricing transparency, which has brought further benefits to corporate travel buyers.
What happened in the haze of '09?
By all accounts 2009 was nothing but a challenge for aviation, with corporate travel demand and volumes hitting the skids in most regions.
Airline capacity was reined in to match the shifting demand levels. Unviable routes were canned and first class services were abandoned by some carriers as J class bookings were replaced with Premium Economy or Y class. Airfares were slashed and low cost carriers jumped at picking up the slack.
All combined, these elements gave companies the upper hand in procuring their entertainment and sports travel. Many reviewed their travel policies to boost their ROI, and in doing so, steered away from using just one or two preferred suppliers. They searched wider for the lowest fares and the dividends paid off with lower average ticket prices.
Who holds the ace in negotiation?
Amid the shift to open skies, travel specialists like Stage and Screen have emerged as the power brokers. We have proven our technology strength in sourcing the best entertainment fares, our relationship strength with a diversity of airlines, and our negotiating strength with those airlines.
Turbo-charged technology
Investment in travel technology has surged over the past five years in particular, coinciding with Internet access to airfares across the world. With global databases of air product now at its fingertips, Stage and Screen can find the lowest entertainment fares worldwide by comparing fares available in different markets. For example, a Singapore-London fare can be sourced in Singapore (in local currency) at more than 50% less than the same fare available in Australia.
We can also use technology to consolidate your travel data regionally and/or globally, and our reporting is more detailed than that of the airlines. You can therefore track your travel spend more effectively and identify whether you need to shift gear in any way to make improvements.
Possibly the most under-rated technology advancement in recent years, e-ticketing, is another tool that has given you the ability to 'buy and fly from anywhere', via Stage and Screen.
More is more
Travel companies that have built relationships with a wider range of airlines have rewarded their clients with better savings. In this case, more has definitely delivered more, in the form of lower prices and wider choice. Stage and Screen focuses on strength in its supplier relationships, so whether times are good or bad, we can always strike the best rates for you. Through our international reach, we can also negotiate competitive airfares based on higher volumes of business.
Knowing our suppliers means we also know the elements that are affecting their industry and pricing. So when it comes to doing deals with them, we have the industry intel to negotiate for the best outcomes. We're on top of the frequent changes in their industry and can keep you up to speed about impacts on fares, schedules and routes. We can also regularly compare our suppliers with others, to ensure their flight schedules and fares are always the best for you and your needs.
Bigger picture - bigger savings
You need to look at your travel management as a whole, or your airfare negotiation will lose its punch. Simply going after the best deal on every booking, without any bigger plan of who is doing what in your organisation, will not save you in the long run. You need direction, goals, guidelines (a policy), and a plan of attack on cost reduction.
Without these elements, you can't properly identify which airlines will best meet your needs in terms of traveller convenience, safety, and cost to your company. You also need to commit to your travel plan to reap the rewards, otherwise any airline deals are not worth the paper they are written on. Stage and Screen will put the following elements of your travel under the microscope:
- how you move as a whole, so we can see where the inefficiencies lie
- your travel policy, to see if it can be tightened up so you can save more
- your levels of policy compliance and whether you need to get tougher with compliance measures
- your travel suppliers and preferred supplier contracts, to determine whether other suppliers are a better fit with your needs.
Open for negotiation
In this era of high technology, which is now a key driver of airline pricing strategies, open skies does in fact mean open for negotiation.
With travel companies like Stage and Screen aggregating airfares from the global market, global distribution systems and the Internet, airlines are more conscious of pricing than ever before. And in these times when air travel demand remains lower than it was say two years ago, they are negotiable on price.
But for how long? As demand for corporate air travel starts to increase again, how can you ensure you continue to receive the most competitive airfares?
Working with Stage and Screen, which has relationships with airline suppliers representing all sectors of aviation, in all parts of the world, is a given. Our industry nous, understanding and negotiating muscle cannot be replaced by any other methods of travel procurement. And coupled with technology and strategic direction, it offers your business the multiple benefits of smarter travel and better savings.
