Dos and Don’ts When Negotiating Corporate Airfares
Negotiating the best deal with airline suppliers is one of the most significant tasks for a travel management company – and it’s rarely easy. Airlines are faced with tight profit margins, pushed even further by fluctuating oil prices, increased competition and higher passenger demands.
To secure the best deal, it’s crucial you approach negotiations in the right way – below are our top dos and don’ts that will help put you in the best position to secure the right deal.
… build relationships
Successful negotiation comes down to strong and solid relationships. Therefore, strengthening your rapport with key airline decision-makers is one of the most important steps you can take. Ultimately, we’re a people business – open, friendly relationships often span entire careers in the industry.
… go armed with data
Before entering any negotiation, you should be completely familiar with both your supplier’s business and your own. Negotiating discounts on fares can be extremely difficult, but if you can justify a discount through firm data, you will be far more likely to secure a deal that works for both parties. FairFly’s benchmarking tools, O&D analytics, and historic spend analysis do exactly this.
… be flexible and compassionate
The airline industry is volatile and constantly-changing. Therefore, a flexible and compassionate approach to negotiations will help you reach a mutually-beneficial agreement. Being authentic in your approach is also key; being honest about the targets your company can reach will help build credibility and will make future negotiations easier.
… be open to alternative negotiations
Airlines’ small profit margins mean that they are often unwilling to discount fares. However, they may be able to compensate by offering deals on alternative travel benefits such as business class upgrades, loyalty perks and surcharge waivers. These can all add up and may even end up being more beneficial to you in the long run.
… talk to your TMC
TMC buying power, especially at the top end of the market have considerable scope to assist you with getting the best fares. They themselves often negotiate additional rates in order to pass them on to their own clients.
Although it may be tempting to commit to more to win a deal, don’t set targets you can’t realistically meet. This will only jeopardise your relationship with the supplier and will make your next round of negotiations more challenging.
… undersell your company
Likewise, don’t be too cautious and sell yourself short. You’re likely to miss out on deals if you’re too conservative over what you can achieve. See the data point above – if you enter each negotiation armed with solid data, you will know what commitments you can make based on previous demand and volume.
… rely on just one supplier
Many TMCs rely on several good relationships with suppliers, so don’t just rely on securing one good deal. Negotiate well with several airlines so that you are not vulnerable to the actions of one supplier.
… hide business shortcomings
Strong relationships are built on a foundation of trust, so withholding negative information about your business or its performance could come back to bite you. Of course, the best deals are often reached if you can prove you can deliver volume of sales. If you have not met previous commitments, have open and honest dialogue and figure out a collaborative way to solve any challenges.
… burn bridges
Didn’t get what you want? That’s okay too. Look at things logically, remove yourself from the decision and think about what’s next. How can I add value to my travel program with other projects? How can I reduce spend in other ways? You’re likely to be dealing with this airline again and again – make sure you’re set up for success next time.