Buyers beware: Good airfares will take some bargaining
Airlines will be tough negotiators with firms with reduced volume
Susan Avery -- Purchasing, 7/1/2009 2:05:22 PM
Fares for travel this month will be as much as 63% lower than last summer, according to an analysis by FareCompare.com. Still, despite opportunities to cut better deals, travel buyers shouldn't expect an easy time at the negotiating table, says Dale Eastlund, director of air consulting at CWT Solutions Group in Minneapolis.
With corporate spending on air down 15% to 20%, negotiating with the airlines will be that much harder for travel buyers at companies that historically have not done a good job at compliance to preferred suppliers and agreements, he says. "Airlines are not going to be all that forgiving of those situations where compliance has been poor and they are trying to negotiate with less volume."
Companies that view the down economy as a time for getting greater savings and open up their contract with reduced volume put that contract at risk, Eastlund cautions. "Opening up the contract doesn't necessarily mean the buyer will retain what he or she has or gain more. It's very possible he could lose what he had from the past."
His advice centers on the importance of having good data on hand during negotiations with suppliers: "I think it is important for travel buyers to have metrics in place to track what's happening in the travel program and repercussions in the policy for travelers who show up in exception reports," he says. "And, driving awareness among senior managers is critical."
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