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The impact of soaring fuel costs is forcing companies to reassess how they plan and manage all aspects of their
staff's business travel.
In
the past few weeks, American
Airlines, United
Airlines, Air
New Zealand, Qantas,
Continental
Airlines, Northwest
Airlines and Air
Canada have all announced significant reductions to their
international operations.
The continual increasing of fuel surcharges, new charges, cancelling of services and
grounding aircraft has impacted the schedules, costs and productivity for business travellers
all over the world - and many believe the full impact is yet to come.
One of the
world’s leading global corporate travel and expense management groups,
FCm Travel Solutions’ global executive general manager, Anthony Grigson, said it was becoming more challenging for corporate travellers to fly where and
when they wanted to.
“The days of airlines flying half full are fast disappearing,” he said. “They are now firmly focused on the return on investment for every seat and
every takeoff, so we are now seeing reduced frequency on low-yield routes, as well as reduced capacity and onboard service on other routes. In
some markets, bookings made up to a week in advance are no longer guaranteeing well-priced seats, and we’re seeing more of our clients being
forced to travel economy on relatively high fares.
“Reduced availability and higher fares, particularly on monopolised or highly frequented routes, is creating inconvenience for business travellers
and blowing out their budgets.
“The corporate sector is also being affected by last minute flight cancellations, then waiting for hours before the next flight. Travellers now need
to arrange their journey with the expectation that it may be disrupted on the day.”
Mr Grigson said that while corporate travel remained strong and airfares were still competitive in some regions, FCm was anticipating a further
rise in the cost of fares and inconvenience to travellers worldwide.
“As a travel consultancy, FCm is playing the role of ‘infomediary’ and advisor for our clients in these fluctuating conditions. We’re arming
companies with the latest information and recommendations so that together, we can tackle last-minute schedule changes, identify areas to
make savings and optimise their travel program,” he said.
“We’re constantly working one-on-one with clients to change their travel policies and help manage the brunt of the impacts ahead of us. Travel
management needs to be strategic, to factor in rising airfares and other costs now being introduced or flagged by airlines – such as baggage
fees, and extra charges for preferred seating, in-flight meals or entertainment.
“Companies taking a ‘do-it-yourself’ approach to their travel management are running the risk of missing out on savings and vital information
about air schedules.”
FCm
recommends the following strategies to help companies control
costs:
- implement a strategic travel management plan that plans and projects their travel activity for the year ahead, and sets ‘tighter’ goals and
parameters
- review their company-wide travel policy to change or consolidate suppliers (eg. airlines) where necessary and maintain savings
- reduce costs by using alternative modes and different classes of transport where feasible, and carefully assessing the need for all travel
- instil a cost-conscious culture among the company’s business travellers by educating them on the travel policy and its benefits, and
encouraging policy compliance
- make all bookings as far in advance as possible eg. four or more weeks ahead, rather than one week
- explore the option of using alternative airports where possible
- keep time and costs streamlined by working with one travel management consultancy (TMC) rather than several, which also benefits companies
by assisting with passenger recovery and managing cancelled flights
- plan for productivity impacts eg. ensure travellers have airport lounge access in case their flights are delayed or rescheduled
- check that their travel insurance services cover unexpected costs, such as ticket costs if their chosen airline ceases operations.
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