A corporate air program can require cobbling together best-of-breed apps throughout the purchasing cycle. Technology offerings for the actual sourcing of air programs remain limited. Home-built offerings, as well as those from travel management companies and consultants are still the dominant choices. In recent years, technology for managing costs, improving the traveler experience and staying on top of air contracts—from airlines themselves and from third-party developers—has become more prevalent. A few impending technology developments, however, could transform the process.
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Sourcing Technology
No major technology suppliers focus solely on sourcing air programs, as occurs for hotel sourcing. While air programs tend to be the largest area of spend for a company, they are less complex than hotel programs—on the surface, at least. Buyers deal with fewer air suppliers, and those contracts usually last for several years, while one-year hotel contracts still rule.
Even so, air sourcing is quite complex. Contracts can contain hundreds or even thousands of lines of discounts that can vary by point of sale, route and inventory class. As such, proper tools are paramount. For starters, the Global Business Travel Association has an RFP tool kit to start the process. In technology terms, the tool kit is fairly basic. It includes an Excel workbook for timing and planning the process and a document to help buyers launch the RFP in customized language that's easy for airlines to respond to.
With no standard product on the market, some companies have built their own contract management tools in-house. Those without the resources or know-how to do so often can rely on their TMCs to manage or provide the technology. The level of attention a company gets from suppliers, however, is proportionate to their size. Smaller companies, therefore, might benefit from a third-party consultant to support sourcing. When issuing RFPs for consultants, companies should focus on what benefits they will get at what cost and what data the corporate will need to provide the consultant. Consultants' technology can validate city pairs where the company is traveling and make sure the travel program's air agreements produce the right level of coverage at the right level of discount in those markets. A contract with a single airline is rarely going to provide sufficient coverage, especially for midsize and large programs, so technology can help discover gaps and develop a strategy to fill them.
Heavy reliance on the TMC in sourcing will not always provide optimal results. TMCs have their own contracts with airlines. Some TMCs offer "contract optimization tools," but they could focus more on maximizing revenue for the TMC than on maximizing savings for the buyer. Buyers should press for more details when offered such technology from a TMC.
Disruptions are on the horizon for airline sourcing. Most immediate is the New Distribution Capability data transmission standard, designed to improve communication between airlines and every party in the distribution chain. It enables airlines to create a more retail-like environment—offering not only fares but also ancillary products like upgrades, bag allowances, Wi-Fi and more—through any distribution channel. Airlines could create dynamically bundled fares for their corporate customers that include perks and amenities based on a traveler's needs and status and then push those through online booking tools. As this becomes more prevalent, it will become more imperative for buyers to ask TMCs about their content strategies, as the savings offered by those that have aggressive NDC strategies will become more significant.
Additionally, blockchain technology could enable smart contracts that can negotiate and enforce contract performance digitally. Smart contracts could even negate expense reports by enabling direct deductions from corporate accounts at the time of booking. How exactly this all will change the process remains to be seen, but buyers should be talking to airlines, TMCs, OBTs and global distribution systems about their plans.
Program Management
Airlines have been introducing and fine-tuning their own portals in recent years to help corporate travel buyers manage contracts, service travelers and access data.
Delta was the first out of the gate among the Big Three U.S. airlines, launching Edge in 2014 for buyers to access on-demand reporting. Later additions included Delta Edge Wallet, which enables upgrade and voucher management; a meetings management portal; and a communication tool through which companies can add their names to messaging that Delta pushes out to corporate travelers.
United's Jetstream product hit the market in 2017, offering reporting on contract performance, forecasts and self-service for penalty waivers. It's adding a meetings portal this year.
American recently released its SalesLink Insights data portal after testing among select corporate buyers in 2018. The portal lets buyers check in on contract performance. Buyers can break data down by market, cabin and other filters to target areas for potential savings.
These portals house contract data, fueled by Prism, plus such data as airlines' operational performance and air program savings that buyers can use for their own reporting to travelers and management. The airlines increasingly are bringing in data from their joint-venture partners, which can be exceptionally useful to buyers who are using multiple TMCs. However, buyers likely need third-party data sources, especially if they have multiple airline partners. Even if they don't, the airline portals largely do not track corporate contracts, such as whether buyers are getting their negotiated fares as opposed to the fares the TMCs contracted with the airlines.
Carriers outside the Big Three have introduced corporate booking portals that can ease management for companies that use them frequently. Southwest has recently enhanced its Swabiz corporate booking portal. Those include reporting on available travel funds and hotel booking via a partnership with Booking.com. JetBlue's Blue Inc. booking tool helps buyers manage policy and payment within a single source. Buyers using airline booking portals should watch what offerings their travelers are getting there, as these portals sometimes provide offers that fly in the face of travel policies.
Rate Management
Airlines are becoming more sophisticated with revenue management technology, and long-running travel management standards like advanced booking policies do not always produce the best fares. Airfare management technology of the past several years enables travel buyers to keep advance purchase policies but also benefit when airfares go down over time.
After a booking, Yapta monitors airfares on similar itineraries and issues alerts when airfare has dropped and savings thus are available. Trappit, based in Europe, offers a similar service and expanded into North America in 2018. FairFly connects with GDSs to audit fares post-booking to look for savings; it's customizable to a travel program's policy.
Airfares do not need to be refundable for these tools to find savings. In case studies, corporations have found savings on nonrefundable fares, as well, taking the rebooking penalty into consideration. That goes for both negotiated fares and non-negotiated fares. As a bonus, these tools serve as an additional source of data for travel buyers, showing booking patterns and the effectiveness of negotiated airfares.
A travel buyer can deploy these tools directly, or a TMC can offer the service. Buyers need to determine whether a direct relationship with one of these tools will serve them. Buyers can decide what level of control they want—for example, whether travelers should OK rebookings or whether travel managers or agents should rebook without asking. One tactic might be to ease in travelers, first giving them control and then making it automatic once they are used to the tools.
Rebooking without human intervention remains a work in progress. Buyers also need to assess the impact to travelers and how it jibes with their company cultures. For example, rebooking could cost a traveler a seat assignment, so buyers need to determine what level of disruption is acceptable and how to deal with potentially angry travelers. Tools generally enable buyers to set a savings threshold so they can put a price on what a disruption is worth.
Is Airline Disruption Compensation Worth Pursuing?
Flight disruption compensation is a relatively untapped area in travel management that technology can make more accessible, but companies will need to decide whether it's worth the effort.
EU law mandates flight disruption compensation when disruptions are caused by conditions within the airline's control. Factors outside airlines' control include weather and civil unrest. This applies to any passenger on any carrier taking off from an EU nation or any EU-based carrier arriving in the EU. Compensation can be as much as 600 euros per passenger on delays of three hours or more.
Many travelers, however, are unaware of this law, and others don't want to go through the trouble of applying for compensation. The process entails filing a form with the airline, but processing delays and pushback from the airline can stretch out the process for months.
Some travel management companies manage this process for travel buyers, and some third-party suppliers can handle it. First, however, buyers need to decide who is getting compensated. One argument is that delayed flight compensation during business travel should go to the company because the business traveler already is paid in wages and the company is suffering the effects of the delay in the form of missed meetings. On the other hand, the traveler is paying the price in terms of getting home late and lost leisure time.
PaxFour takes the position that the company should receive the compensation. It analyzes a company's travel data against its database of past delays and cancellations, and when it finds a flight eligible for compensation, it reaches out to the affected employee to request power of attorney. That lets PaxFour take over the process and return the compensation directly to the company. AirHelp and some TMCs return the compensation directly to the travelers. While this won't provide any financial benefit to travel buyers, it does improve traveler satisfaction.
In the U.S., the compensation process is murkier because it is not regulated by law other than instances of involuntary denied boarding. However, airlines often offer compensation to travelers in the form of vouchers or frequent-flier miles. One supplier, Service, monitors travel plans and negotiates with airlines to get compensation on behalf of travelers. Vouchers can go back to the company for future business travel use, while miles would go to the traveler. For companies that pay an annual fee, Service turns over all compensation negotiated on behalf of the traveler or travel program. Companies that hire Service via a commission structure pay it a percentage of the cash value of miles awarded.
Experience Management
Technology designed to improve the traveler experience, particularly in times of travel disruption and irregular operations, has emerged over the past several years.
For the front end of the booking process, data provider RouteHappy created a rating system for the flight experience based on seat quality, entertainment options, availability of Wi-Fi and in-seat electrical outlets, as well as actual trip duration for that particular flight. Egencia was the first corporate agency to partner with RouteHappy to display flight ratings, in 2015; it expanded that relationship in 2017 to list amenities and display rich content like product pictures in the booking tool. ATPCO acquired the company in 2018, which enabled RouteHappy to pull in more data from more airlines and integrate with more tools. With its richer content and its data reservoirs, ATPCO helms a new display standard the airline industry has christened the Next Generation Storefront. It's still in early days and is the source of discord among airlines in terms of how to execute the display. For now, NGS uses a star-rating system in the booking display to compare different carriers' various offerings. Emerging booking providers like TripActions and TravelPerks have launched NGS displays.
While flight ratings provide some insight into historic performance on the route, travel disruptions are always possible. For their own part, airlines have become more proactive in managing delays, offering fee-free waivers so travelers can change their flights when events like severe thunderstorms, blizzards, hurricanes and volcanic eruptions are poised to cause delays or cancellations. However, these waivers can be difficult to track, as the various airlines publish them multiple times per day. TMCs receive the information, but travelers also likely receive them directly through email, airline apps and other communication lines from carriers.
Flight disruption management tools like KnowDelay and FlightStats are geared toward the passenger. Lumo uses predictive analytics to alert travelers ahead of flight delays and offers a dashboard so travel managers can spot predicted disruptions across their travel populations and can explore flight alternatives for those at risk. Freebird handles rebookings; travel managers determine which travelers need protection, and when those travelers experience disruptions, the service offers flight alternatives and lets travelers rebook. TMCs increasingly are partnering with these providers and might offer them as an extra service.
Wrangling the Data
To determine a buyer's performance against an airline contract, airlines largely rely on Prism, which is a part of Sabre Airline Solutions. Prism essentially collects airline reservation information across booking sources. It enables airline sales managers to see their performances against other carriers, by cabin and by fare for each origin and destination. Most major full-service carriers participate, though some low-cost carriers like Southwest do not.
Prism strips out personalized traveler information, but airlines can determine a client's market share via International Air Transport Association numbers assigned to each of a TMC's customers. As such, bookings made outside TMC channels will not count toward corporate market share.
Because airlines rely on this data for contract performance, travel buyers should stay on top of it so they can adjust to meet marketshare goals ahead of scheduled reviews with airlines, or at least so they can be prepared to say why they are not hitting their agreed-to shares. Reasons might be that the preferred carrier is publishing higher fares or that the carrier's schedule is incompatible with the travelers' needs.
The aforementioned dashboards that airlines provide for travel buyers rely on Prism data, so they are one window into performance. Travel buyers also can request reports from their TMCs, which receive raw Prism data if authorized by the corporate, or they can get the data from Prism themselves. However, Prism has discontinued its Prism Avion air contract management tool for buyers. In its absence, corporate travel analytics organization Prime Numbers Technology has put out Prime Sourcing, a tool that can monitor contract performance and report on market share and spending.
TravelCast Consulting principal and founder Kim Castro, Microsoft global travel sourcing manager Diane Lundeen Smith, corporate travel consultant Shari Meisner and United Airlines director of distribution Tye Radcliffe advised on this article.