Wisdom can be gleaned from a closer look at your largest travel cost buckets. This month, it’s your airline spend.
Almost all travel buyers understand the value of leveraging and negotiating airline contracts. Buyers want the ability to drive travelers to their preferred carriers and certainly point of sale discounts help accomplish this desired end result. But diving deeper into the data that can be gathered from airline spend reveals that beyond the deals, there is so much more to be gained from this huge budget bucket.
In previous articles in these pages, we’ve dealt with how to build a strategy that will take our data from merely Big to truly Phat. One of the first items on the list is to take a supplier time-out. In essence, we want to ensure that we have the right suppliers in our program who can help us meet our business objectives.
With air, we need to expand our thinking about the data that is available to us and how we can use it to improve the managed travel program and the traveler’s experience. At our fingertips airline spend presents a mountain of actionable data. In particular two areas might be considered low-hanging fruit, ripe for the picking: trip disruptions and the cost of these disruptions to the organization.
Traveler, InterruptedFirst, let’s explore trip disruptions. In 2014 the average flight delay was 57 minutes and the average connecting time is 40 minutes, so you can imagine how many people miss connections every day.
Consider the case of high-performing sales executive Jane. It is a Friday afternoon, and she is on her way home from a successful business trip. She boards her first flight and all is well, until weather impacts her route and her flight is put in a holding pattern to land. She knows at this point she will not make her connection and probably won’t get home for her child’s recital.
Sad to say this isn’t the first time this has happened to Jane. Knowing the frustration she will go through once she lands, Jane logs onto her inflight WiFi, searches for the next best flight to get her home the soonest and books the full fare one-way ticket. Very frustrating for Jane, and very costly for the corporation.
Now let’s imagine a different scenario; suppose Jane already knew that her TMC was monitoring her flight and once she has landed she would receive a text message with her new flight information. Less stress for Jane and less expense for the company; certainly a better value proposition for both parties.
Wouldn’t it be great if you could proactively communicate to your travelers? Have your TMC handle your travelers’ trip disruptions? Manage their rebooking? And at the end of the day report on it? We would venture to guess that most buyers and travelers would think this is good thing. So why aren’t we seeing more travel management companies and corporate travel departments offering solutions like this? Possibly the reason could be as simple as more buyers need to be asking for these types of services.
While there are a few TMC’s that are providing trip disruption services, typically fees for this type assistance are much greater than traditional transaction fees. Thus it is often reserved exclusively for the traveling VIPs or designated high-end individuals within an organization. But these are also the people who travel the most, have a higher status on one or several carriers and probably know the ins and outs of airline disruptions.
What about the folks that don’t know what to do? Who’s going to be there to help them out?
A TMC providing trip disruption services would do two things: first potentially reduce call volumes during peak times of disruptions (keeping those service level agreements intact) and provide an additional service offering to corporations (and thus a new revenue stream for the TMC). It would be much better for a corporation to pay a fee for this type of service as opposed to forking out for that full fare one-way ticket home that Jane just purchased. Oh, and not to mention the reduction in stress on Jane, one of the companies top sales people. Remember folks, there is a price being paid for the wear and tear on travelers.
So how does this magic happen? Well, first of all, you need real time access to real time flight information. History is a nice subject to study in school, but it won’t do you or your travelers any good to look at flight disruption data that’s weeks or days – or even a few hours old. You need actionable data in the moment.
Such flight tracking information is available from several services; one of the leaders in the industry is Flightstats. Many travelers are already familiar with Flightstats and its consumer facing app that tracks flights. Flightstats tracks over 90,000 flights daily which represents over 92 percent of schedule flights worldwide. It is more than likely that your traveler’s flights are on their radar.
With access to such data, just imagine how much information you as a travel buyer can uncover about your air program; not the same old information but new and Phat information.
New Insights on AirThere is a second layer of importance around the impact of trip disruptions, and that is the ability to report on how these disruptions are affecting your managed travel program.
Let’s face it. There is a cost to an organization anytime a trip is disrupted, but many buyers aren’t taking this into account when looking at their supplier mix. Do we need a supplier that has poor on-time performance, continued delays and chronic cancellations as one of our preferred suppliers? Maybe not.
If the air carrier is costing you more in delays and cancellations, that attractive point of sale discount may turn out to be not all that lucrative. Travel buyers should be keenly interested in the data surrounding the air carriers in their program and the performance of each carrier. Buyers can and should develop the ability to measure how a carrier is performing by different types of disruptions: mechanical, weather, crew, etc.
With this information in hand, it’s possible now to go to your human resources department and obtain an average hourly rate for your traveling population. Take that rate times the number of hours your travelers have been disrupted. Most buyers and their companies will be surprised to find how big that number may be.
Do a little more math and break down those numbers by carrier, so that during your next quarterly business review you present that cost to your airline partner. It’s a great talking point and one that should not be ignored. Travel buyers want to provide the best suppliers to their travelers; this is one way to use Phat Data to gain additional insight into an air carrier’s performance. It’s not always about the airfare.
This also gives the airline an opportunity to share with the buyer how they have performed in their service recovery. This new insight allows buyers to ensure that they have the best performing carriers in their program.
Providing trip disruption information is just a small piece of what Flightstats can offer. The company is a data solutions/services company that taps into over 500 different data sources to manage airline-related data and then harmonize it in their data warehouse. Having a data resource like this in the industry opens up a whole new world of Phat Data to both buyers and suppliers.
Given access to this treasure trove of historical and current data, it’s now possible to apply business intelligence and analytics around this information. The results can have a huge impact on our travel programs and industry as a whole. Taking a look at air programs more holistically will enable buyers to enhance service offerings, provide Phat Data around air travel patterns and problems, and ensure that the right suppliers are in the program at the right time.
Next Steps to PhatIn the next five years we will continue to see the amount of data that is available in the travel industry as a whole grow tremendously. But we will also see increasingly sophisticated buyers and suppliers using data to gain wisdom in their program and have more actionable data around their travel.
The data around air spend is more than just trip disruptions. It is also about having the ability to do predictive analytics and understanding because x event happening, y might be the likely outcome. This will enable suppliers to proactively respond to issues, improve service offerings and reduce costs to the carriers.
So where do data providers like Flightstats see data in the travel industry heading in the next five years? “We are excited about the future and how data has become an integral part of the travel ecosystem,” says Carlo Palazzese, vice president of marketing at Flightstats. “Providing the most reliable and relevant data not only gives companies a competitive advantage but we also believe it may provide organizations insight into how they can find solutions for a better environment.”
So can Phat air travel data make the world a better place? Certainly for today’s travelers like Jane, the answer is yes. Tomorrow we may be able to enhance our analytics to predict the impact of air trips on our travelers, on our company’s bottom line, on CO2 emissions and who knows what else? And, yes, make the world a better place – just one Phat Data step at a time.
Jennifer Steinke is manager, corporate travel for ACT, Inc., and an industry thought leader with over 27 years experience managing corporate travel. She holds an MBA plus Certified Corporate Travel Executive (CCTE) and Global Travel Professional (GTP) certifications from GBTA. Jennifer strives to deliver innovative and thought provoking ideas to the corporate travel industry.