As the airline landscape evolves, it is vital to optimize your air program and revisit your contracts to ensure they deliver the greatest value to your company and your travelers. It’s tempting to think a more consolidated airline market would make this easier.
Whatever role you play in your corporate travel organization, offering the best experience for your travelers and obtaining the best value for your company are top of mind. This includes extracting value from your airline contracts and maximizing applicable discounts. This would be challenging enough in a static environment, but in corporate travel your only constant is change. Traveler routes and requirements evolve as your company experiences growth, changes strategy, signs new business, or opens additional locations.
The airline industry has also been in flux, adding to the challenges you face. Large airlines have merged with major competitors and purchased smaller ones. New entrants have shaken up the market and forced legacy carriers to innovate. Meanwhile, the airlines have improved their data analytics, further upping their advantage. With limited time and resources to manage your travel program, the challenge of keeping up with these changes is real.
As the airline landscape evolves, it is vital to optimize your air program and revisit your contracts to ensure they deliver the greatest value to your company and your travelers. It’s tempting to think a more consolidated airline market would make this easier. After all, mergers mean fewer carrier options to deliberate between. The problem is that consolidation reduces competition, decreasing motivation for airlines to offer deep discounts unless it’s tied to performance above and beyond expected share.
As the airline industry shrinks, complications grow. Ideally, your corporate travel contracts mirror your company’s travel patterns to maximize discounts, boost compliance, and ensure your contract targets are always fulflled. The remaining carriers expect more share, making contracts that much harder to satisfy. Contract enforcement also increases as carriers capitalize on a less competitive environment to reduce or remove a discounted rate. The many side effects of airline consolidation require constant agility and a strong understanding of your business and traveler needs.
This Egencia whitepaper assesses the risks of airline consolidation and takes a regional view of the market in North America, Europe and Asia-Pacifc and examines opportunities for companies to maintain an edge.
