New low fare classes are tempting, but what’s the value proposition for corporate travelers?
By Keith Loria
Low cost carriers have driven legacy airlines to offer cut-rate, cut-service bargain basement fares to stay competitive, but its only more recently that these Basic Economy and HBO (hand baggage only) fares have made something of a dent on corporate travel programs.
The main complaint from travel managers about these basic fares is they distort the fares that offer the best value for the business traveler. Not always is the lowest fare really the cheapest fare these days, after you add in amenities like baggage fees, assignable seats, etc. But when business travelers see the fares out there online, they often think they can beat their travel program’s deal by booking direct.
Matthew Patterson, vice president of client relationship management at BCD Travel’s consulting group, Advito, says most of its corporate clients block these fares in their booking tools as corporate travel requires a certain level of flexibility, and these fares create more issues for travelers vs. the savings provided by them. The net result of the trade-off between fare savings and incremental ancillary fees is not clear to most companies.
“It is very difficult to communicate all of the rules associated with these fares (i.e. luggage or seat assignment not included), which then causes extra charges, and added stress and frustration for the corporate traveler,” he says. “Many times these fares do not allow accrual of loyalty points, which is also a key driver for corporate travelers.”