Comment: Are low-cost carriers the future of business travel?

Barry Whittaker, executive director of Travel Leaders UK, says no-frills airlines deserve to be taken seriously as part of a corporate travel programme

I have been in the travel business a long time, and little surprises me anymore. However, when reading earlier this year that Ryanair was planning a return to the global distribution systems (GDSs) and after a share of corporate travel bookings I nearly choked on my cornflakes.

After all his bluff and bluster, branding agents parasites that should be taken out and shot, Michael O’Leary had finally realised the only way he could continue to grow his airline was to embrace the managed travel sector.

Perhaps I shouldn’t have been too taken aback by the dramatic U-turn given the Irish carrier’s record losses posted in autumn last year. It had to do something.

But its infamously cavalier attitude to customer service made me wonder whether or not its sales people would even be entertained by travel buyers and travel management companies (TMCs).

A few months on I’m prepared to give O’Leary the benefit of the doubt. Fares are already available in Galileo, and should be on Sabre and Amadeus later in the year. The launch of flexible tickets, reserved seating and fast-track access at certain airports proves things are being taken seriously. It also deserves credit for its long overdue but warmly received customer-centric rebrand.

Easyjet is, unsurprisingly, well ahead of the game. It has been engaged with the corporate travel sector since 2007, distributing its fares through the GDSs and negotiating directly with TMCs and corporates. It has already established itself as a genuine alternative for business travellers flying point-to-point on short-haul European routes.

Products designed specifically for business travellers have also been well developed; flexible fares include an unlimited number of free date changes, upfront seats and speedy boarding, one free bag in the hold and VIP fast-track through airport security.

The biggest advantage easyJet holds over its Irish competitor is its network of hubs. Ryanair has made a successful business out of flying to secondary airports, creating markets where they had never before existed. That’s fine for students and leisure travellers who have no problem catching a bus or train for a two-hour journey to a city centre. But it won’t cut the mustard with business travellers.

No matter which region of the world your travellers are in, there is more often than not a low cost option. Asia-Pacific is perhaps unique in that there is still a very clear distinction between budget and network carriers. In Europe and the Americas they often compete head to head on major short-haul routes.

Some of the world’s largest carriers, including British Airways and United Airlines, have even sought to replicate elements of the traditional low-cost model. It’s not unusual to be offered ancillary services over and above the base fare that once upon a time included all the frills.

Flybe, Vueling, Germanwings, Norwegian and Aer Lingus are also successfully growing their corporate footprints in the UK and European markets. And they are here to stay.

Many corporate travel managers and buyers have already embraced what LCCs can bring to the travel programme. Frequent travellers able to make advanced bookings for straightforward point-to-point journeys can save their companies thousands in a calendar year.

However, as LCCs move further towards the corporate mainstream many buyers are considering the value for the first time. It is important, therefore, to question the impact budget airlines have on the travel policy and preferred supplier programme.

Start by evaluating your travel needs and the culture of the organisation. In many cases opportunities to make savings will present themselves. And those savings can be channeled into travelling smarter, and getting in front of more clients and prospects.

However, it is important to remember the base fare for a seat on an LCC is not the total cost of a trip. You have to consider airline schedules and airport locations. A network carrier may be able to get your traveller there and back in a day, whereas the cheaper LCC ticket may require an overnight stay which only adds the cost of accommodation to the cost of the trip.

And how much will be spent on ancillaries? Onboard meals, Wi-Fi (you won’t have free lounge access), and the transportation costs that could mount up if you’re arriving at a secondary airport. It all adds up. As always, travellers will use a product if it makes their lives simpler. If it adds complexity to their itineraries, they’ll push back.

However, with the number of flexible options available in the marketplace increasing every quarter, travel buyers are encouraged to engage with their TMC and the low cost carriers, and to remain open minded about the route deals and discounts that could be on offer. My advice to buyers is to engage with LCCs and remain open minded. They’re far more flexible than they once were, and could add value to part of your programme.

Sourced from Travel Weekly

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