Web Travel Agenda

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Web Travel Agenda

• Web fares and restrictions
• Inventory pricing
• Potential savings
• Payment issues
• Engine search
• Web limitations
• Reward programs
• Carrier reliability
• Carrier route and time table limitations
• Low cost carrier misconceptions
• If its red or green. Thanks but no thanks

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Web Fares and restrictions

• Carrier inventory pricing is a contentious issue
  for most of us, and not all that easy to
  understand
• However, we all have budgets to which we must
  work.
• Lets understand how the airlines price their
  inventory
• First, the low cost carriers need to achieve
  maximum capacity utilisation or they will simply
  not survive.
• They do this through pricing with the intent to
  fill the aircraft.
• A single minded goal and one from which we can
  all benefit.

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Web Travel Restrictions

• It needs to be noted that the lower the price of
  the seat, the more restrictions there are.
• This is to discourage cancellations and flight
  changes.
• These additional administrative tasks cost money
  as they need people to administer them (cost)
• It is important to know what restrictions are
  attached to each class seat before making a
  selection.
• So it is important that you know your traveller
  before making a web purchase.
• The traveller who is constantly changing his
  itinerary is perhaps not the best web customer.
• Web fares are however, an excellent choice for
  the more reliable and/or cost conscious
  traveller.

4
Web Travel Seat pricing

• We also need to understand, as best we can, how
  classes are priced
• Carriers offer a wide range of seat prices to
  best accommodate all income groups and budgets
• An important point to note is that the cheap
  seats are not in the cargo hold!
• They are where ever on the aircraft you choose at
  the time of checking in
• You could be sitting next to someone who paid
  twice as much as you did
• He simply did not book as early as you did
• Their full inventory range is there for you to
  purchase for business travel
• No seats are reserved for the private traveller

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Web travel seat pricing

• Inventory prices do not remain constant
• Carriers will check how sales are progressing on
  a regular basis. If the aircraft is not filling
  up as quickly as they would like, the next
  booking you make, you will notice the prices have
  come down, same trip, new passenger
• Like-wise if the aircraft is filling rapidly and
  you go into the system to make a second booking,
  you end up paying around R300 more, same trip,
  new passenger. Half an hour apart!

6
Web Travel Potential Savings

• Having highlighted the restriction issues (costs
  associated with itinerary changes) let me
  emphasize the potential cost savings to be had
  through web bookings
• An exercise we ran showed web prices to be, on
  average, R1000 less per return trip than a
  corporate rate
• That equates to a saving of R10 million if you
  make around 10 000 trips per year.
• A very tidy sum indeed and not to be sneezed at

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Web Travel Potential Savings

• If you now consider the cost of change imposed
  on you by the carrier
• To change to a later (or earlier) time, R50.00 to
  R114.00, airline dependent
• If no same seat class is available on the new
  aircraft, an upgrade is sometimes needed
• Upgrade costs on web fares vary but can be as
  little as R100 or as much as R300, carrier
  dependent

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Web Travel Potential Savings

• You might even be one of the lucky ones where the
  carrier does not ask for upgrade costs. (either
  you have learned to smile very sweetly or you
  have mastered the distressed traveller look?)
• Tip If your passenger puts himself (at the
  airport) onto the new flights waiting list,
  upgrades are not applicable. This is not
  information that is volunteered
• So, lets work on a middle-of-the-road change fee
  of R75
• With a saving of R1000, you would need to make 13
  changes to one trip to match your corporate rate
• Not likely to happen
• So web fares, even with restrictions, should at
  least be considered before being rejected
  outright.
• There is a clear place for them

9
Web Travel Payment issues

• Many travellers do not want to use their own
  credit cards for business travel
• This means that your company lodge cards have to
  be used
• The need to present the credit card at the time
  of check in when purchasing on the web has
  (fortunately) now fallen away for most carriers

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Web Travel Payment issues

• With SAA (as an example) you would need to join
  their skins program if booking off their web site
  as card presentation is still mandatory with them
• This causes traveller dissatisfaction and check
  in delays
• With a company lodge card, it is also not a
  simple issue to remedy (you hold the card back at
  the office or it is lodged with your TMC)
• Hence the SAA skins program where your lodge card
  is recorded as a pre approved method of payment.
• Your traveller will not be inconvenienced at any
  time
• Do check on this issue beforehand
• There were innumerable problems with the skins
  program in its early life
• 10 bookings go through but the 11th is rejected
• One very angry employee at the airport to be
  sure!
• Rejection notification was also not too good so
  last minute travellers invariably did not know
  about a problem until they arrived at check in
• We do not use the skins program ourselves.
  However, reports are that it is now working very
  well and can be trusted

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Web Travel Engine Search

• The one negative with web bookings is that of the
  time required to complete a booking
• You need to log into each site one by one to
  check who is offering what before a final choice
  can be made
• It is not practical to reserve a number of
  options and return at a later time to confirm one
  and delete the rest (after traveller
  consultation)
• You can reserve with the option of paying later,
  but this tends to make travel more complicated
  and certainly more time consuming
• We will talk later about prices changing by the
  minute just to make your life even more
  frustrating
• Some of the carriers are looking into the SBT
  feature of storing tentative bookings which will
  be heartily welcomed.
• This will not freeze the price however. A final
  costing will still be given at the time of
  payment being made. You will just have an
  estimate.

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Web Travel Limitations

• Unfortunately, you cannot load your own car hire
  agreements and rates onto the carriers web page
  so this entails a second booking
• The same applies to your own preferred hotel
  rates. This then entails a third booking to
  conclude your travellers needs.
• Time, time, time

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Web Travel Single skim

• We have spoken to a few carriers with regard to
  them getting together so that the traveller can
  see all carrier special offers on one web page
• Some have listened. Some have wondered what we
  have been smoking!
• We can but hope that, in time, open
  competitiveness will be the order of the day

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Reward programs

• This has got to be the biggest stumbling block to
  low cost carrier and web fare support from the
  corporate world
• The boys want their miles
• Corporate incentives can be agreed upon and
  implemented
• Example
• One of the larger carriers reward programs needs
  you to spend R100 000 in order to redeem miles
  for one (1) domestic ticket (at R4000 CT return
  25 trips)
• Another of our larger players needs you to spend
  R80 000 in order to redeem for one (1) domestic
  ticket
• If you were to support low cost carrier and web
  fares and save the R1000 per trip, you could very
  easily afford to send the traveller and spouse on
  a week end away and still have change left over

15
Reward programs

• An actual example of a low cost carrier CORPORATE
  RATE to Cape Town return is R1130 (no miles
  earned)
• The same journey on a major carrier is R4000 but
  he gets his miles
• Send him and his spouse away will cost R2260
  using the low cost carrier corporate rate
• You have just saved R1740 on one trip ( x 25
  R43 750.00 saving on one traveller)
• He has just got two (2) domestic tickets.
• Better than any reward program I know of!
• Throw in hotel and meals and you are still saving
  in excess of R40 000 for just that one persons
  business travel
• How many travellers do you have?

16
Carrier reliability

• We have had many talks with the low cost carriers
  traversing our skies
• Their on time statistics are as good as any of
  the larger domestic players
• In fact, one of them surpasses the major players!
• They are subjected to the same safety rules and
  regulations applicable to the major players, and
  they comply fully
• Their aircraft, as with the major players, are
  serviced to stringent flying calendars (hours)
  and the preventitive maintenance programs in
  place of world class
• They carry sufficient inventory (aircraft spares)
  to ensure their aircraft are not kept grounded
  any longer than it takes to remedy the problem
• All carriers experience mechanical and/or
  electrical problems from time to time
• The larger players are not exempt by any means

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Route and time table limitations

• These are the only real problems the low cost
  carriers have
• They do not cover all corners of our country
• They do not offer as many flights as the larger
  players
• So we accept that and support them for all other
  routes and times

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Low cost carrier misconceptions

• Their pilots are trained at the same training
  centres as any other carriers pilots
• In fact, our South African low cost carrier
  pilots also undergo two refresher training
  programs a year in Sweden to ensure that world
  class standards are maintained
• A cheap seat will not see you sitting in the
  cargo hold
• Their aircraft will not fall out of the sky
• I have had many Tiger staff members inform me
  that they will not die for Tiger put me on
  carriers X or Y only
• However, as soon as they are having to pay for
  personal travel out of their own pockets, guess
  which carriers are suddenly as safe as can be??
• I want my _at__at_ miles

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Travel is a personal thing

• On a more serious note
• Savings are important to your company and
• Trouble-free trips are important to your
  traveller
• Combine the two and you can consider yourself a
  successful travel administrator for your company.

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Tiger Brands

• Thank you for your time