As increasing numbers of airline joint ventures continue to enter the marketplace, the navigation of airline contracts is changing. Such joint ventures – in which airlines share codes and revenues, as well as capacity, scheduling, pricing and frequent flier programs (e.g. the Delta – Air France – KLM – Alitalia joint venture) – have introduced a new world of contract negotiations in which a corporation may be required to contract with all partners in a joint venture rather than with individual airlines.

While the negotiating process may be eased with one point of contact and one contract for multiple allied carriers, new challenges have also been introduced, such as reduced capacity and the potential of less pricing flexibility.

Of the 120 corporate travel managers surveyed by AirPlus in the winter of 2012, 46 percent have already contracted with a joint venture, while another 22 percent are considering doing so. However, approximately one-third of the respondents (32 percent) say they have not contracted with a joint venture and are not even considering it.

Respondent travel programs represented a mix of global (41 percent); multinational (13 percent); domestic, with heavy outbound international travel (13 percent); and domestic, with light international travel (33 percent).

Not surprisingly, those with domestic programs with light international travel were the least likely to have contracted with a joint venture – 50 percent say they have not and are not considering it. In the other categories, however, the majority had already contracted with one joint venture: 56 percent of those with global programs, 60 percent of those with multinational programs and 60 percent of those with domestic programs that have heavy outbound international traffic.

The response of travel managers to joint ventures is mixed. While 38 percent say there has been no down side to their air program related to joint ventures, 43 percent also say there has been no up side to their air program.

While there were few differences among the responses based on the type of corporate travel program, one notable difference is that a full 79 percent of those with multinational programs say there is no down side to joint ventures.

Of those who do see a down side, the number-one disadvantage was that they feel they are forced to negotiate with joint venture partners to get meaningful discounts, though they would prefer to work with individual airlines (24 percent). In addition, 21 percent feel they have to be more creative in their negotiations, but ultimately can get the value they need from a joint venture. However, 12 percent say they are no longer able to negotiate meaningful discounts with their preferred airline partners.

On the flip side, almost one-third (32 percent) feel that negotiating and managing contracts is easier with the one point of contact that comes with joint ventures, and 14 percent say streamlined data reporting from airlines makes it easier to manage their program. However, when it comes to overall service, 16 percent say they have experienced a decrease in service.

For those who have found advantages to joint ventures, the number-one benefit has been extended route coverage (34 percent), and 10 percent noted fewer connection issues due to better schedule alignment.

Good or bad, it appears that joint ventures are not only here to stay, but continue to become even more prevalent. Several new ventures have been either requested or approved in just the past few months, including one between British Airways and Japan Airlines, which began seeking approval for a joint venture between Asia and Europe in February; the approval of a joint venture between Virgin Australia and Singapore Airlines in December; and the November approval for a joint venture between American Airlines and Qantas.

Download the full survey results here:
TheWire_April 2012

Additional Resources

EC Probing Joint Venture Among Delta, Air France-KLM And Alitalia

2012 Industry Forecast Spotlight: Industry knowledge mitigates risk when negotiating airline contracts

Download the new white paper here

As Millennial workers—loosely defined as 21 to 30 years old—continue to enter the workplace, traditional management is struggling to figure out how this new generation fits into the workforce and what accommodations need to be made for them.

In February, AirPlus brought those questions to nearly 100 corporate travel managers, drilling down to assess how Millennial travelers compare to other generations in the workforce when it comes to travel policy compliance and how corporate travel managers are responding to these young employees.

The majority of corporate travel manager respondents—56 percent—have not looked at compliance rates by age. Surprisingly, those who have looked at the data report conflicting results: 11 percent say they have data that compliance rates are the same among differing age groups while 5 percent say they have data that Millennials are more compliant
and 4 percent say they have data that Millennials are less compliant. A similar split is seen among those who have not done hard research: 11 percent suspect Millennials are more compliant and 12 percent suspect Millennials are less compliant.

While such results might lead a corporate travel manager to believe there are not substantive differences between Millennial compliance and that of other travelers, another recent study shows travel managers might be better served by exploring this area more in depth within their own companies.

When Business Travel News surveyed 502 U.S. business travelers for its study “Connecting With Managed Travelers,” the self-reported results from the business travelers showed more of a disconnect than corporate travel managers might have supposed. When asked about 2010 transactions that complied with company preferred vendor and booking channel policies, 43 percent of those under 35 reported compliance with hotels compared to 76 percent for those over 55 and 61 percent in the 35 to 54 year-old age group (an 18 percent difference).

Hotels were not an anomaly. Similar results were seen in all categories of spend in the survey, including airlines, car rental, corporate card, booking channel and expense reporting tool (see BTN‘s “Connecting with Managed Travelers,” page 8, for exact numbers). Despite such variances, nearly two-thirds of the respondents to the AirPlus survey (62 percent) noted that they have not taken any action to specifically address the needs of Millennial travelers. Of those who have taken action, 7 percent have added approved booking channels, 8 percent have added or changed other preferred suppliers, 11 percent have added or changed technology policy, 16 percent have added mobile apps, 17 percent have added or changed communication to educate about the specifics of policy and procedure.

Although numerous articles, surveys and books in the past several years have called out the differences in the way Millennials process information and how they prefer to receive information, only 22 percent of the AirPlus respondents say they sometimes target communications to Millennial travelers and a negligible 1 percent always do. More than three-quarters of respondents (77 percent) say they never do.

As one of the core elements of a managed travel program, communication is key in explaining the details of corporate travel policy as well as in underscoring the importance of following policy. It‘s likely that the lack of communication specifically targeted to Millennials at least contributes to a theme seen in the open-ended responses to the question: “What is your biggest challenge in managing Millennial travelers?”
Among the responses were:

• “Trying to get them to utilize the tools approved. They like to explore and go out on their own.”
• “Getting them to read.” “Getting their attention. Our company  doesn’t  allow apps on the mobile devices sowe have to rely on intranet and email. The Millennials seem to view these as a waste of time.”
• “Educating them on preferred suppliers.”

Still, almost half the responses to that question indicated no difference seen in Millennials as compared to other travelers, although it‘s unclear if that‘s a result of effective policy and communication, or if responding travel managers were simply unaware of specific issues with Millennials. At minimum, it may be time to assess the presence of Millennials within the travel population to decide when and how to develop the right communications to drive compliance in this group.

Additional Resources

BTN Research Issue: Connecting With Managed Travelers (full report)
http://businesstravelnews.texterity.com/businesstravelnews/20111024/#pg1
The Expanding Roles of Millennials in the Workplace
http://www.forbes.com/sites/danschawbel/2011/12/13/the-expanding-roles-of-millennials-in-the-workplace/
The Millennials Check In
http://www.nytimes.com/2012/03/13/business/young-travelers-drive-changes-in-hotel-industry.html?_r=1&scp=1&sq=millennials&st=cse

Download the full survey results here:
TheWire_March 2012 (PDF)

As corporations grapple with integrating meetings management into a comprehensive travel management program, the area of payment strategies has met great change. The consensus is that data drives smart policy and supplier decisions; but, the decision to move to models that provide the best data has been slow.

In January AirPlus asked about preferred methods of payment for meeting expenses excluding air and separately about preferred method of payment for air expenses associated with corporate meetings. With the exception of a lodged/central bill method, which was popular for both categories of spend, travel professional responses showed that payment for attendees’ air travel was handled quite differently from other meeting expenses.

Meeting cards are used by 32 percent of the respondents for meetings payments excluding air. Within that group, there was clear preference for meeting cards assigned to individual planners, cited by 20 percent of the total respondents. In contrast, only 6 percent said they used meeting cards assigned to individual meetings.

Download the full survey results here:
TheWire February 2012 (PDF)

In short, today’s corporate travel manager needs to be a jack of all trades, able to analyze data at one moment while effectively communicating with a headstrong Millennial about the importance of policy compliance in the next moment, and understanding the ins and outs of a contract in the next. And that’s just in an ordinary morning.

To better understand the skills and challenges of today’s corporate travel manager, AirPlus surveyed 143 corporate travel managers in early January.

The results clearly show that most corporate travel managers do not enter the field already armed with the knowledge they need from coursework or previous positions. Instead, they have picked up their knowledge while on the job—close to three-quarters (71 percent) said anywhere between half and 100 percent of their job-related knowledge has come from learning on the job. Only 9 percent said on-the-job learning accounted for less than 25 percent of their job-related knowledge.

Download the full survey results here:

AirPlus_The Wire_January 2012

As corporate social responsibility (CSR) increasingly becomes part of mainstream business practice, companies are revising not only their own practices but looking to their preferred suppliers to reinforce important CSR goals. According to the 175 corporate travel managers AirPlus surveyed in November about the CSR initiatives at their own companies and throughout their supply chain, this is especially true in the area of environmental standards.

Unlike other CSR categories, the green initiatives of suppliers can have a direct impact on a company’s own goals for reducing the environmental impact of business travel. To that end, the percent of travel manager respondents who expect green initiatives of their preferred suppliers was 42 percent – significantly higher than any of the other categories in the survey. Implemented at 55 percent of the travel managers’ companies, those percentages also represent less of a gap between what corporations do themselves and what they expect from their preferred suppliers than in any other category in the survey.

Despite relatively high expectations of supplier CSR initiatives, few companies currently include CSR criteria in their travel supplier RFPs, ranging from a low of 10 percent who include it in payment RFPs to a high of 15 percent who include it in hotel RFPs.  Slightly more plan to include such initiatives in their RFPs in the coming year, with car taking the lead at 19 percent, then hotel at 16 percent, air at 14 percent and payment at 10 percent. However, the majority currently have no plans to include that kind of criteria: 63 percent of corporate travel managers say they have no plans to include CSR criteria in their payment RFPs, followed by 62 percent for air and 57 percent for both hotel and car.

The lackluster numbers are not surprising given that while the majority of respondents do say they consider CSR and green initiatives when making their final decisions, for most respondents, this is not a consideration that’s key to final decision-making process. Only 2 percent said such initiatives were of “critical” importance in the preferred supplier decision-making process. Another 15 percent said such information was “important” to the process, while the highest number – 43 percent – said it was “considered.” The remaining 40 percent said it was either “not very important” or “never considered.”

For a complimentary copy of full survey results, please click here:
AirPlus The Wire December 2011

Additional Resources:

New Business Travel Emissions Reporting Standards Expected Next Month

Despite Rising Emissions, Bloomberg LP Plans No Travel Cuts 

Corporations looking to cut back on travel moved to alternatives such as , webcasting and teleconferencing in the midst of the recession.  AirPlus asked corporate travel buyers this month about the current state of travel alternatives.

The responses show that the concept of virtual meetings has become firmly engrained in corporate culture. Only 1 percent of those surveyed said that virtual meetings have decreased as in-person meetings and travel increased in the past year. Nearly one-third (32 percent) said virtual meetings have increased in the past year, but they have not replaced in-person meetings, while another 32 percent said virtual meetings have increased as a replacement to in-person meetings and travel. For another third (33 percent), the volume has remained steady.

For the majority of respondents, the most compelling reason for travel alternatives is the increased cost of travel, ranked by 63 percent as the most “urgent” reason for turning to travel alternatives. “Decreased budgets” was the next most cited urgent reason, with significantly fewer respondents – 32 percent – ranking it the most urgent.

And while champions of travel alternatives tout the beneficial effects on employee quality of life and corporate social responsibility, these are not the most compelling reasons for most respondents.

Regardless of the reason for choosing travel alternatives, the travel professionals who responded to the survey were decidedly ambivalent about the effectiveness of such decisions. More than two-thirds (68 percent) would only commit to saying remote conferencing is “sometimes” as effective as meeting in person. Another significant group was even less convinced of the effectiveness of remote conferencing: Six percent said it was “never” as effective as in-person meetings while 15 percent said that was “rarely” the case. Only 12 percent was firmly in favor, saying remote conferencing was “almost always” as effective.

For a complimentary copy of full survey results, please click here:
AirPlus The Wire November (PDF)

Additional Resources:

Sabre Teams with Polycom on Remote Conferencing Booking Platform

Videoconferencing Set to Soar: Buyers, Planners Must Stake Claim

Former BCD Travel Exec Developing ‘Global Videoconferencing Network’

Wouldn’t it be a great idea to host a community forum where we could have general discussion around travel tips etc but also host specific communities for users of different travel, expense and finance tools where people could share tips, best practises and ideas.

Regards,

Simon

Through the end of last year and the beginning of this year, industry experts were bullish on business travel, with business travel predictions for volume and pricing nearing or exceeding pre-recession levels.

But a negative U.S. jobs report in early July, coupled with a Standard & Poor downgrading of the U.S. government in early August and ongoing economic problems throughout Europe, brought up the specter of a double-dip recession and put corporate travel departments on notice that growth might not continue at predicted rates.

To take an in-the-moment pulse on the potential effects of negative economic indices, AirPlus surveyed 152 corporate travel managers at the beginning of September about the state of their corporate travel budgets and plans.

The economic uncertainty was clearly reflected in the world of managed corporate travel. Survey respondents were nearly split when asked if they expected their company’s travel program to feel immediate pressure to control volume/costs in light of some economic indices and public sentiment about recovery turning from flat to negative. Nearly half – 47 percent – said yes, they did expect to feel immediate pressure, while slightly less – 41 percent – said no. Another 12 percent simply didn’t know.

Those who did expect to feel pressure to make changes were prepared to pull several cost-saving levers in the next six months. More than half anticipated stricter pre-trip approvals (58 percent) and shifting more travel to web conferencing or telepresence (56 percent). Significant numbers were also prepared to implement class of service restrictions on air (44 percent) or hotel (30 percent) and tighten other air policies (34 percent). Nearly one-quarter (23 percent) were even prepared to impose a temporary travel freeze.

Among the 19 percent who said “other,” several noted strategies revolving around stricter monitoring and adherence to policy and delaying or decreasing travel, although not an outright  ban of all travel.

It is in this uncertain economic climate that corporate travel managers begin 2012 corporate negotiations, balancing the potential for budget and volume cuts against anticipated rate increases.

For your complimentary copy of the results, please click here:

AirPlus_The Wire_October 2011

Additional Resource:

Advito Projects Higher 2012 Travel Prices

Portugal is in the news – the business community is closely monitoring developments in this Iberian country. How does travel management react these days?

AirPlus: Looking at travel management, is there something very special in your market compared to travel management in other countries of the world?

Susana Luz (SL): Apart from the size of the travel management market – which is much smaller than other countries in Europe – there is no special difference. Studies indicate that travel managers in Portugal for instance took the same measures to react to the recent crisis, controlling costs by booking with more anticipation and choosing the less expensive options.

AirPlus: What are the main travel management trends and developments in Portugal?

SL: I would say that travel figures will grow mildly in 2011. The booking process tends to be more decentralized, giving more responsibility to the employee, and mobile technology will become more and more important due to the use of smart phones. Finally, in general the use of credit cards will increase.

AirPlus: How mature is TM in Portugal?

SL: When I visit customers, I can see every day that this topic is much more in the eyes of the top management of the companies. It accounts for significant costs, and so they feel that they should pay attention to it. How? Companies try to find a better administrative process, they analyze the figures and try to get better deals with their suppliers.

AirPlus: What do you consider to be the biggest opportunity and the biggest challenge for travel managers in your market?

SL: The costs of travel will continue to grow. So there definitely is an opportunity for travel managers to see their role within the organization become more important. Also with the internet, knowledge is much more easily accessible to travel managers, so they can be better prepared. The biggest challenge in my opinion would be the movements of the airline industry, that is airlines buying other airlines, and the introduction of ancillary fees. That makes it much more difficult to know the exact cost of the trip.

AirPlus: Is there an AirPlus U.S.P. or an advantage over the competition for AirPlus in Portugal?

SL: We do have competition, however none of the other companies is completely focused on business travel. Today AirPlus benefits from the special position of being the only payment solution capable of providing the data that is essential for companies to reconcile, like the cost center or the travel agency invoice in the statement. And, of course, the insurance solution.