Five steps to …Negotiating discounted air fares

Do the deal

Airlines are less willing than in the past to give discounted fares to corporate clients, and the size of those discounts has in many cases shrunk. But there are still good deals to be negotiated, especially if your company flies in first, business and premium economy classes, and on long-haul routes.

Step 1 – Find the data

As always, you can only manage what you can measure – and airlines will respond much better to buyers who demonstrate detailed knowledge of where their people fly, how often and booking which fare classes. Work with your travel management company to gather the data. Other sources include your card provider (especially if you have  lodge card, also known as centrally billed account) and expense tool.

Step 2 – Get help

Many buyers find they lack the resources and analytical tools to manage the complexities of airline bids alone. Your TMC account manager may be able to support you but travel buyers often conclude they need to hire an external consultant to run the process for them.

Step 3 – Analyse fare classes carefully

Airlines often respond with a matrix of proposed discount levels for different fare classes. Make sure you understand these in detail and match them with your demand patterns. For example, there is little point accepting an offer which includes generous discounts on the most expensive flexible classes if your travellers generally buy lower-priced, more restricted fares on which no discount has been offered.

Step 4 – Don’t over-commit

It is tempting but shortsighted to promise airlines more than you can really give them to secure a favourable deal. Most air deals are based on market share and carriers have access to intelligence which tells them what their share is on any route. If they find you aren’t meeting targets, they could reduce or even scrap your deal next year.

Step 5 – Look at soft benefits

Airline agreements are not all about hard cash discounts. Other benefits you may be able to negotiate include “waivers and favours” on departure and name changes, or even occasional upgrades. Alternatively, if you don’t have substantial spend to justify a discounted deal, look at options like airline small and medium business programmes that offer benefits such as lounge access or award corporate as well as passenger loyalty points.