Travel managers, during a strategy session at the American Express offices in New York’s World Financial Center, said last week that the airlines were starting to lose corporate business because they were offering too many online deals cheaply.
Corporations must commit to a certain travel volume in order to be able to negotiate lower airfares, hotel rooms and car rentals.
But airline are excluding the lowest fares from corporate deals meaning that it was sometimes easier for a corporate traveller to buy their fare on the internet. With cheap online deals available, business travellers were buying tickets themselves and not going through corporative travel programs.
‘The airfare pricing right now is totally eroding the credibility of travel managers and travel counselors. People don’t know who to believe,’ Cindy Shumate, senior director of global travel at Gartner told Reuters.
A survey conducted last month by the Business Travel Coalition found that 69% of frequent travellers believe they can find better air fares than their corporate travel agencies.
In five years, business fares have gone from being 2.5 times higher than leisure fares to five times higher today.
The general feeling among participants in the strategy session was that airlines are building fences around travellers to keep them in their ‘high-fare corral’ by widening the gap between business and leisure fares.
What they want is for carriers to fix pricing gaps, give them access to low web fares and ease restrictions on nonrefundable fares.
Travel managers say the gap is too big and airlines are getting tougher in negotiating, forcing them to balance the trade-off of issues created by the web.
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