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Lesley's Column

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19th December 2016

Preparing your airline contracts

Whilst most people are focusing on their Christmas shopping I am preparing to negotiate airline contracts for the next 12 months or so.

The question is should I put the air travel out to a full airline tender or are there other options and are those other options right for my particular business?
Over the past few years I have been using a combination of negotiated deals and spot buying to ensure the best purchase of airline tickets.
In domestic and regional markets, low cost carrier fares have forced airlines to compete. So do you actually need any route deals? Spot buying could be a perfectly practical option.
If your travellers are able to plan in advance, if they attend regular meetings with times that rarely change spot buying restricted fares can achieve considerable savings. This approach requires good communication and the ability to influence traveller behaviour and ensure the lowest logical fares are booked.
If you go with spot buying, weigh up the cost of fares and travel amendments compared with the price of more flexible fares. If your amendments start spiralling, alarms bells should ring out that spot buying isn’t working as it should.
TMCs negotiate their own airline deals. This offers a further option and may cover those routes that require a little more flexibility. The challenge with spot buying is that travellers may lose some of the benefits associated with route deals, such as airline lounge access.
Finally, understand your air spend. Has it increased or decreased and if so is it specific routes or overall. It’s important to identify genuine trends or spend which may be influenced by time-limited projects.