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Mystery buyer
In each issue, one of our travel buyer readers tackles a subject close to their heart, sparking lively debate on our online forum. Join in at
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UNBUNDLING… BUNDLING…
LIFE USED TO BE QUITE straightforward: you would book a trip with your preferred airline, pay your fare, receive a ticket and be reasonably confident when checking-in at the airport that you and your baggage would be properly looked after all the way to your destination – it was a ‘full service’. Of course, you didn’t know if you had a good deal or not, since everyone was paying the agreed published IATA fares.
Then along came deregulation and competition – fares fell and we suddenly had real choices to make. But, with stockholders having replaced governments as airline owners, the accountants found themselves under increasing pressure to produce dividends. So steadily, our highly competitive fares came with a raft of draconian restrictions and penalties attached – modification, cancellation, refunds etc. Then the ‘givens’ started to disappear as the product was unbundled. We found ourselves being charged for onboard meals, drinks, hold baggage, priority boarding... Unfortunately, none of this seemed to help overall fortunes of airlines, so now we read of the latest strategy: ‘bundling’ – where carriers such as American Airlines are looking to give their domestic customers all their needs ‘rebundled’ into a package at a single price. As a travel manager, my contract of employment says somewhere that I should “ruthlessly embrace change” – but, come on guys, hasn’t this all gone a little too far now? My job is
...AND THE FORUM COMMENTS
www.buyingbusinesstravel.com/forum
Air fares have always been complicated but, if anything, they have become even more so. The airline that has a simple website and an honest pathway to check-out gets my money. But, alas, nowadays that is a rarity and brand loyalty is being sacrificed – is that the way to win customers?
to help save money by identifying and presenting the lowest reasonable available fare to the traveller. But with all these variables in the equation now, it’s near impossible. Our self-booking tool (SBT) should make life easier for everyone – but with all the options and extras to consider, completing a booking can take longer than doing the weekly shop online at Morrisons. At least at Morrisons I can compare apples with apples. Over 80 per cent of our air reservations are made through an SBT – our travellers like using it, because it’s quick and simple, and while the travel manager (me!) saves significant amounts in agency fees, it also drives traveller behaviour towards accepting lower fares. But, if having accepted the lower fare, a number of essential extras have then to be added at additional cost, the traveller may well end up having been better off accepting a fare with another carrier in the first place. Airlines should recognise the corporate traveller at point-of-sale by including the basics for a business trip in with the base fare, such as one checked bag, meals, seat selection and no corporate credit card surcharge. n
Criticising the airlines isn’t going to get you anywhere, not only because they’ve had decades of it and have thick skins, but also because it misunderstands where they are coming from: airlines have been net destroyers of investment capital for decades. They’re once again trying to reverse this. Consolidation is part of it, and cost-cutting, but they are also trying to grow – in some cases in size, in all cases in profitability. The strategies have been formed in response to the market conditions, and in some cases they conflict with the strategies of their corporate customers.
It says it all when whatever strategy an airline is pursuing is implemented using a technique which frustrates its most valuable customers – which, I'm always being told we are by the airlines. Even coffee shops are customer-orientated – so why can't airlines manage it?
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WHAT DO YOU THINK? Join the conversation at the travel buyers’ forum:
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WHERE WILL IT ALL END?
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