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spend, Credit Suisse was not leveraging its undoubted buying power so undertook an RFP with great results. Gillian Upton has the details
Get the most out of air spend 1
Despite a signifi cant air
WITH AN AIR SPEND of £157million, Swiss bank Credit Suisse was dissatisfied with the deals it was achieving with its airline suppliers. With that size of spend, the bank needed
to leverage its considerable buying power and, with its existing airline contracts due to expire, the bank went to RFP in order to strike better deals. “We wanted to maximise our buying
power across all regions,” explains Bernadette Basterfield, Global Head of Travel and Expense at the bank. In an industry vertical where business
class is more the norm than not, it was a prize worth fighting for. The bank’s policy dictates that travellers fly business class on flights of five hours or more. Its top ten routes included highly competitive routes where well-priced fares could be achieved. However, Credit Suisse was losing out because it had too thin a spread of airline suppliers in its progamme. “We were not offering a huge incentive for airlines to give us a good deal and we wanted to shift share,” says Basterfield. There was also another factor conspiring against them, explains Basterfield. “It’s become so challenging; airlines hold more cards now as consolidation in the market- place means that there are less of them to negotiate with.” Read on to discover how
The percentage savings on average air ticket price achieved by Credit Suisse
the tender process went and whether Credit Suisse achieved its goal.
4 16 THE BUSINESS TRAVEL MAGAZINE
THE RFP The bank’s travel management company, American Express
Global Business Travel (GBT), helped manage the entire RFP multi-step process. Basterfield oversaw the RFP for Credit Suisse, led by Kate Watson in her Global Travel Team. “Every client is looking for incremental
3
savings, and Credit Suisse’s air programme represents a huge spend,” says Stephen Arbuthnot, Director, Global Business Consulting at GBT. After the airlines submitted their tender documents, stage two of the RFP was to manage two rounds of negotiations with the shortlisted airlines. “Round one presented disappointing offers but by the final round we generated savings,” says Arbuthnot. “Credit Suisse didn’t decide who they were going with until the
The length of the contracts secured by the RFP exercise in number of years
2
last moment and we helped them run
scenarios so they could make the right choice.”
THE CHANGE MANAGEMENT PIECE “One of the challenges of going with a globally consolidated
approach is that it doesn’t please everyone,” explains Basterfield. “It can be very noisy. The US might be happy but not the UK employees, or vice versa.” Resistance to the change in preferred airlines came from those employees with high status loyalty memberships with some of the incumbent airlines. The solution was to negotiate flexibility on FFP status with the new roster of airlines “to help transition from one partner airline to another and give them the same status,” explains Basterfield.
“Going with a globally consolidated approach doesn’t please everyone”
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