EXTRA COSTS One key problem is that it is hard for corporate buyers to get to grips with just how much extra is being spent on unbundled fares. “While extra costs in terms of taxes are itemised on the flight booking, we often have to add charges for bags or seats later,” explains Paul East, chief operating officer for Wings Travel Management. “This means raising ad- ditional invoices, which is inconvenient for corporates.” The problem is often with collecting the additional data. “Data is still sporadic in markets around the world,” says HRG’s Dear, who points out that when a booking including fare and additional baggage is made through a low-cost airline, the fare is usually charged to the credit card when the booking is made, while the bag is charged on the date of the flight. “This makes connectivity difficult, especially on a central account or lodge card, which may have 80 flights booked but data for 60 bags only,” he adds. “Corporates are now focusing on a better understanding of the total cost of a trip and are increasingly aware of the additional costs that can arise – but they need better data in order to challenge and negotiate successfully.” At
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company Citrix, global category manager Jef Robinson says he is well aware of the changes brought about by airline un- bundling and is “amending policy where
One key problem is that it is hard for corporate buyers to get to grips with just how much extra is being spent on unbundled fares
necessary to ensure continuity for our people travelling on business”. He adds: “Right now, it is difficult to specifically identify additional expenses as part of total cost, but this is something we are addressing by enhanced report- ing and consideration of more advanced management tools.”
GROWING PRESSURE But there is some good news for travel buyers and managers. Pressure is growing – particularly in the US – for airlines to make ancillary products and services available through the global distribution systems (GDSs) and third-party agents used by TMCs and others when making corporate bookings. This would, it is argued, provide greater transparency on fees being charged by different airlines, as well as enabling the fees to be booked and
AIRPORTS JOIN THE UNBUNDLING BONANZA
AIRLINES ARE NOT ALONE in the aviation world in trying to earn extra revenue from travellers: airports are doing their best to emulate their success. Dropping off or picking up a colleague or friend at an airport, for example, used to be a simple courtesy provided by operators and costing nothing. Now, according to the Civil Aviation Authority (CAA), the majority of the 31 UK airports it monitors impose some sort of small fee for dropping off or picking up a
26 BBT NOVEMBER/DECEMBER 2014
passenger, as part of a whole new raft of fees and charges. And a dozen of these airports now also charge – typically between 25p and 50p each – for the plastic bags in which to place liquids when passing through security.
Such nickel-and-diming, moreover, is becoming a truly global phenomena. Venezuela’s Maiquetia International Airport in Caracas, for example, last summer imposed a £12-per- person departure tax on all
passengers to cover the cost of a new air purification system, unsurprisingly leading to it being dubbed a ‘breathing tax’.
Keeping up with additional fees and charges is no easy feat for travellers and regulators alike. The CAA helpfully publishes a quarterly online update of charges levied by most UK airports and the domestic and international airlines using them, yet it warns that its information can quickly become out of date.
There are also less obvious hidden costs of flying. A recent Skyscanner survey of 1,500 European travellers, for example, found that virtually all (96 per cent) believed unlimited wifi at airports should be offered for free. Sadly, only London City and Birmingham airports met this aspiration in the UK (some 24 did in the rest of Europe), while Heathrow, for example, provides only 45 minutes free before charging £3 for one hour and £5 for two.
BUYINGBUSINESSTRAVEL.COM
paid for at the same time (empowering so-called ‘transactability’). A number of non-US airlines already allow ancillaries to be sold via GDSs – including Air France-KLM, Etihad, SAS and Qantas – while the US Department of Transportation is currently trying to decide on how far US carriers should go in selling via third parties. A decision is now expected sometime in 2015 after a recent consultation among 700 or so airlines, travel suppliers and consumer groups revealed sharp differences of opinion. And there could also be progress
from IATA’s New Distribution Capabil- ity (NDC) programme, currently being tested, which would enable third-party agents to sell ancillaries at the same time as air fares. Perhaps there also needs to be a greater
focus by corporate travel departments on some of the basics as well, including establishing which unbundled extras used by their employees when travelling are reimbursable – and which are not.
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