The Impact a TMC Has on Your Bottom Line – A Supplier Perspective

The business traveler is the single most important type of customer to an airline. Airlines have created several types of corporate agreements to capture business travel revenue. Historically, performance has focused on revenue and on measuring against a predetermined goal. It is exceedingly difficult to measure performance, as most airlines have very rapid schedule and market changes. As prices continue to rise sharply, it will be pivotal to maintain focus on your airline programs.  Do you have the right mix of carriers? Are you supporting your programs to the best of your ability? How do you communicate with non-compliant travelers? By working with our corporate travel team, you can leverage your strengths to maximize value from each of your agreements.

Why are fares rising so quickly?

There are many reasons airline fares fluctuate. The simple answer is “supply and demand.” We are in a unique environment with multiple forces driving higher fares. Crude oil prices have the greatest impact on these price increases. Airlines refine crude oil into jet fuel. A reduction in crude oil supply will lead to price increases. Whether due to government policies limiting drilling or to geopolitical issues currently unfolding in Ukraine, these increases have been real. Other forces that put pressure on prices include cost of labor increases, fewer overall employees, and an increase in the cost of goods and services needed to fly an aircraft. A demand issue that is not always noticed by the public can also lead to price increases. Airlines will trim the number of flights they offer based on crew and labor shortages. A small reduction in the percent of passengers flying with an airline takes thousands of seats out of the market. Demand is reduced, and upward pressure on prices increases.

Time to focus on performance statistics again.

For the majority of the last two years, much of the emphasis in the airline industry (and rightfully so) has been on cleanliness. Although all major airlines already had “hospital-grade” clean air, cleaning procedures were ramped up, as well as the communication efforts to the flying public. With the mask mandate having just been lifted, it is time to revisit the cornerstone of airline statistics – On-Time Performance.  Keep in mind, a flight is “on-time” if it gets to the arrival gate within 15 minutes of its scheduled arrival time. North American carriers collective on-time performance in March slipped to an average of 72.3% compared to 75.6% in February. This was a relatively big decline in performance.  Of the Big 3 (Delta/American Airlines/United Airlines), American Airlines was the only one to show a month-over-month improvement to 81.9% (from 78.7%).  Many factors go into these performance stats, including weather, staffing, mechanical issues, and air traffic control issues.

Use your airline mobile app.

All major airlines allow you to manage your flight experience on their mobile app. These apps include bag tracking and management of flight interruptions. All airlines are still experiencing very high call hold times, and the mobile app is the quickest way to correct a travel disruption.

Budget Your Time.

Plan on a full airport and a full flight.  Try to get to the airport two hours early.  Always pack medicine in a carry-on bag.  And when try to enroll in the TSA Pre-Check program – a game changer to avoid long TSA wait times. [source]

TSA throughput numbers clearly show recovery.

The number of travelers going through a TSA checkpoint in the US continues to grow.  A recent 7-day stretch compares the numbers from 2019 – 2022.  Five of the last seven days measured tracked over 2 million travelers, nearing or exceeding numbers the same day from 2019.