Hotels, car rental companies and TMCs continue to charge fees, but it’s the airline fees that have a larger impact on travel management today.

The Department of Transportation in early May released final figures for 2009 airline ancillary fee revenues. The report showed that as a group United States airlines pulled in $7.8 billion in ancillary fees, a large increase over the $5.5 billion collected in 2008. That increase alone makes it clear why more than 72 percent of respondents to AirPlus International’s The Wire survey last month chose airlines as the supplier category most affecting their travel budgets with fees. DOT numbers, however, do not tell the entire story.

 
The $7.8 billion as tallied by the government agency does not include many of the fees that continue to vex travel managers. For DOT, ancillary fees include baggage fees, reservation change fees and miscellaneous operating revenue. The revenue pocketed from seating assignments and on-board sales of food, drink, pillows, blankets, entertainment, or any other ancillary items are reported as transport related revenue and cannot be identified separately.

That’s a situation that travel buyers know all too well and they are looking to airlines, their travel management companies and, particularly, credit card partners to help them break ancillary charges out of the total ticket price in order to gain visibility and begin to manage the fees. Indeed, wherever buyers are challenged by unbundled fees – whether from airlines, hotels, car rental, payment or TMCs themselves – there is a clear opportunity for suppliers to fill the travel management gap.

Among survey respondents, half indicated that their travelers have no visibility into ancillary fee charges at the time of booking a business trip through their travel management company. Nearly 29 percent of respondents said their TMCs outline all the fees associated with a given trip at the time of booking. Under 8 percent, however, responded that their TMC partner is able to outline the fees and help manage them, while more than 13 percent of respondents did not know if possible airline, hotel or car rental fees were addressed in any way at the time of booking a trip.

Indeed, the AirPlus survey showed that nearly 38 percent of travel buyers found their supplier relationships more difficult to manage as a direct result of the complicated fee landscape. An equal number of respondents said that fees have eroded supplier value propositions, and more than 27 percent said they have considered shifting share away from fee-heavy suppliers or dropping them altogether. Respondent comments indicated that share shifting, at least, had gone beyond the consideration stage to taking action.

Download the free PDF for full survey results.
AirPlus…The Wire May 2010 (PDF, 265 KB)

Additional Resources:
Ancillary Fee Implications Vex Travel Pros
http://www.management.travel/news.php?cid=ancillary-fee-ancillary-fees.Mar-10.25

Aiming For A Budget: Continuous Cutbacks, Fees, Transformations Test 2010 Forecasting
http://www.procurement.travel/news.php?cid=budgeting.Sep-09.01