The Business Travel Magazine March

THE KNOWLEDGE 4 SUPPLIER PERSPECTIVE Norman Gage, proprietor, New Generation Consultancy FUELLING THE FIRE

Industry veteran Norman Gage calls for airline fuel surcharges to be included in contract negotiations and offers advice on getting the ball rolling with suppliers

O

ne old and wise TMC sage once said that it wouldn’t be long before the airlines charge you for the rubber that they leave

at the end of a runway. How true that has become with the creeping commoditisation of the airline product through the segmentation of the ticket price. Since setting up my consultancy business

some 14 months back, I have attended a number of seminars and conferences in the hope of hearing that someone has the temerity to tackle the airline community over the exclusion of fuel surcharge from corporate deals. Travel managers need

Norman Gage Proprietor,

New Generation Consultancy (NGC)

NGC was formed in September 2011 by industry veteran Norman Gage. His

previous background was in the aviation

sector before putting in a 35-year shift in the TMC arena,

latterly as director of business travel at Advantage, the leading UK

independent travel agency consortium. He instigated the Focus Partnership

(formerly known as Focus Group) that led to the setup of

Focus4Fares, Focus E tool and Focus 1GDS and the

introduction to the industry of fare

distribution through Cat 35. Norman is currently working with TMC start-ups, as well as repre-

senting MyFareBox in the UK. He has also appeared on radio and TV commenting on industry issues.

to have a change of mindset from being a buyer to being a negotiator. No matter how harsh this may sound, it would clearly nail any colours to the mast as to the corporate's future relationship with the airline community. At The Business Travel

Conference last year, a workshop called ‘Tackling the big spend – air travel’ discussed the benefits of including fuel into the airline contract discussions. I think all of the 'negotiators' present at this particular workshop were delighted with the upfront discussion led by Vincent Lebunetel of Carlson Wagonlit Travel. He put forward a very creditable business case for the inclusion of fuel and other elements of

cost being included in airline negotiations. We can make a certain judgement on the

flow of petrol prices as we see the pump price move, but the airline community would argue that they use kerosene and it is sold and bought differently. Fuel surcharges have been around so long

that if you ask an airline representative when they first started they won’t know the answer, but for the past two years the fluctuation in price has been minimal. So what prevents the airline pricing team

from including fuel in the overall price of the ticket? The answer to this conundrum is the key to successful negotiation. There is no step-by-step solution, just a number of key action points. The first is to start small, in as much as with the airline that you use least and possibly has the most to gain from you. Unfortunately, larger airlines may not mind losing your business in the short term, in the belief that this shortfall can be made up elsewhere. Secondly, work closely with your travel managememt company. They have more than just your company as a client, so by using their clout as well as your own, this will aid the negotiations. Also, look at those airlines that already include fuel in the headline price and patronise those, if you can. Make other airlines aware of why you are including them as part of your long term commercial strategy. It may also prevent this minority of airlines from joining the vast majority. Be prepared for a long haul. Set the scene

now for the 2014 negotiations and continually chip away on the subject at each and every commercial meeting that you have with the airline community. There is no doubt that the ‘Wifim’ factor

– an acronym for What’s in it for me? – is great for you but what’s in it for the airlines that you choose to negotiate with? This may take some research into the

routes that your travellers will need to use, and the volumes of travellers that will be in the air. Furthermore, airlines always prefer to be flexible when travellers board their plans and wish to turn left into the business class cabin. The name of Jon Bon Jovi’s new single

“Here to take a stand ‘cos you can” has never been more apt.

THE JARGON BUSTER

ACRONYMS: sadly you just can't get away from them in the dynamic world of business travel. So to help you out we've listed some of the most commonly used ones below, just so you don't get your Global Distribution Systems confused with the Government Decontamination Service.

ACFO Association of Car Fleet Operators ACTE ADR APIS

Association of Corporate Travel Executives average daily room rate

Advanced Passenger Information System ATOC Association of Train Operating Companies

BAPCO British Association of Professional Conference Organisers

BAR BTC

best available rate business travel centre

CDW collision damage waiver CRM CRO CRS CSR DDR ETES FFP GDS

hotel booking agent

customer relationship management central reservation office central reservation system corporate social responsibility daily delegate rate end-to-end solution

frequent flyer programme global distribution system

GTMC Guild of Travel Management Companies HBA

HBAA IATA ITM KPI

LRA MI

MIA MPI

OTM PNR RFP ROI SBT SLA SME

Hotel Bookings Agents Association International Air Transport Association Institute of Travel & Meetings key performance indicators last room availability

management information Meetings Industry Association

Meetings Professionals International online travel management passenger name records request for proposal return on investment self-booking tools

service level agreement small and/or medium-sized business/es

SMMP strategic meetings management programme TEM TMC

travel and expense management travel management company

12 THE BUSINESS TRAVEL MAGAZINE

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