CTMs face fresh challenges in negotiating global airfares

A screenshot of Elise Weber speaking at the webinar

Negotiating with airlines is becoming even more challenging for buyers as they face price volatility and regional differences, with fares falling in Europe, flattening in North America and ballooning in Asia.

Elise Weber, co-founder/chief sales and marketing officer, Skytra, an Airbus subsidiary, said the key to working with airlines was to split the world into different markets and to conduct regional negotiations. She was a speaker at the recent June CAPA Live.

A screenshot of Elise Weber speaking at the webinar

Weber added regional indices offered more predictable prices, with only a two per cent deviation.

A Singapore-based regional travel manager in the pharmaceutical industry told TTGmice its global air RFP bid was in, but “there was no mention on specific airfares”.

“As I see it, the airfares will not be cheap”, she continued, adding that US airlines like United and Delta were also not talking about ramping up schedules, but focused on duty of care and sustainability.

She commented: “ We cannot push the airlines even if tickets are 10 to 20 per cent more expensive. We just have to make do and work with what we have as there is no budget increase.”

Ericsson uses CWT and FCM trackers to monitor the situation and prices are being driven up by scarcity, according to Florence Robert, regional travel manager, Asia Pacific.

“There is not much we can do at this stage, but just to monitor and make decisions based on what we see,” she added.

Jane Sim, commodity manager ASEAN at Siemens, noted: “Buyers have very limited (buying) power, especially during this period to reduce airfares. But we managed to withhold fare increases for all our existing contracts even though there has been a drastic drop in air travel.”

Meanwhile, Benson Tang, executive director, Corporate Travel Community, in presenting the outlook of business travel by 2024, noted internal meetings could face a potential loss of 50 per cent followed by employee training and development by 40 per cent, supplier meetings by 30 per cent, service and support trips to customers by 25 per cent and events by 15 per cent. Other reasons take up the remaining 20 per cent.

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