For in-house buyers,


the increasing similarity of product means negotia- tions come down to just one thing. “Negotiations are – and also were in the past – for the most part about price,” says Ruediger Bruss, Conti- nental AG’s corporate purchasing global cat- egory manager, travel and mobility services. “While there were differences between business class products, all of the offer- ings provided a sufficient level of comfort. This holds even more so now.” Bruss highlights Gulf carriers for “doing a very good job” in terms of sup- plier relationships. “Also, carriers with a


smaller footprint tend to behave more coopera-


WEALTH OF PRODUCTS Despite not giving the full picture, OAG’s statistics are a good indication that buyers have a wealth of products to choose from and that there is a healthy turnaround from the dark days of the recession. There is a potential downside to this for buyers, however – greater choice as more airlines offer comparable products, such as flat beds, means there is pressure on yields despite increased demand, ac- cording to Rory Egan-Thomas, air product manager at FCM Travel Solutions and Corporate Traveller.


“Competition on a number of routes is quite saturated and business travel- lers are becoming a lot more savvy – not as many buy [full fare] J class and most airlines have introduced an SME [small- and medium-sized enterprises] fare proposition,” he says. The latter has affected pricing, as SME fares often have no advance purchase restriction,


56 BBT MARCH/APRIL 2015


“Competition on a number of routes is quite saturated and business travellers are becoming a lot more savvy”


something that has impacted on transac- tion values. “Numbers are up and we are selling more premium cabin seats – it’s just that the yield has dropped off over the last 12 months.”


Egan-Thomas adds that premium air


travel “has never been cheaper”, a bonus for the passenger, but not such good news for buyers and TMCs that get rebates dependent on revenue.


tively than the typical home carrier,” he says. “We reward such behaviour with shifting as much business as possible to carriers with which it is easy to do busi- ness with.”


On the other side of the fence, things


look pretty good for the airlines, with major carriers profitable and in invest- ment mode. This is paying off in terms of premium traffic – no longer do a handful of carriers offer a superior product. Ameri- can Airlines, for example, reported record profits in January, part of a virtuous circle of investment in its premium cabin.


STRONG UK MARKET Dave Thomas, regional sales manager at American Airlines, estimates that the UK transatlantic market as a whole grew by 4 per cent in both 2013 and 2014, and adds that the UK market is “very strong right now”, something the airline is benefiting from as it upgrades its image.


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