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 measurement to a pre-determined goal. It is exceedingly difficult to measure performance, as most airlines are having very rapid schedule and market changes. As prices continue to rise drastically, it will be pivotal to continue to 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 deal with non-compliant travelers? By working with Fox you can leverage your strengths to receive maximum value with each of your agreements.

Mike Heck, Vice President, Supplier Solutions at Fox World Travel

 

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 that has multiple forces leading to higher fares. The price of crude oil has the largest impact on these price increases. Airlines refine crude oil into jet fuel. A reduction in the supply of crude oil will lead to price increases. Whether due to government policies limiting drilling, or geopolitical issues currently being realized 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. The demand is reduced, therefore upward pressure on prices is applied.

 

Time to again focus on performance statistics.

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 look at the cornerstone of airline statistics once again – 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 Airline/United Airline), American Airline was the only one to show a month over month improvement to 81.9% (from 78.7%).  Many factors go into these performance stats from weather, staffing, mechanical issues, air traffic control issues etc.

 

Masks now optional in US airports.

Changes occur rapidly in today’s airline industry.  As of April 19th, the Biden Administration announced that the TSA will no longer enforce the federal mandate requiring masks in all U.S. airports and on aircraft.  Here are some additional tips to consider as you gear up for your next flight. 

 

Stay alert to changing Covid-Era protocols.

Masks are now optional, but the choice remains at the individual traveler level. Experts agree that wearing a KN95 mask protects the wearer, even if others around them are not wearing masks. Travelers are encouraged to carry a mask throughout their journey as face coverings may continue to be a requirement in other aspects of travel including international travel.

 

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 full flight.  Try to get to the airport two hours ahead of time.  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 look at 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.

 

 

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