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 face tight profit margins, pushed further by fluctuating oil prices, increased competition, and higher passenger demands.
To secure the best deal, you must approach negotiations correctly – below are our top dos and don’ts that will help put you in the best position to secure the right deal.
DO... build relationships
Successful negotiation comes down to solid relationships. Therefore, strengthening your rapport with key airline decision-makers is one of your most important steps. Ultimately, we’re a people business, and open, friendly relationships often span entire careers in the industry.
DO... go armed with data
Before any negotiations, you should be thoroughly familiar with your supplier’s business and your own. Negotiating discounts on fares can be extremely difficult. If you can justify a value through firm data, you will be far more likely to secure a deal that works for both parties. Oversee’s benchmarking tools, O&D analytics, and historical spend analysis do precisely this.
DO... be flexible and compassionate
The airline industry is volatile and constantly changing. Therefore, a flexible and compassionate negotiation approach will help you reach a mutually-beneficial agreement. Being authentic in your system is also crucial. Being transparent about the targets your company wants to go builds credibility and makes future negotiations more straightforward.
DO... be open to alternative negotiations
Airlines’ small profit margins mean 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 benefit you more in the long run.
DO... talk to your TMC
TMC’s buying power, especially at the top end of the market, has considerable scope to assist you with getting the best fares. They often negotiate additional rates to pass them on to their clients.
Although committing to more to win a deal may be tempting, don’t set targets you can’t realistically meet. This will only jeopardize your relationship with the supplier and make your subsequent negotiations round more challenging.
DON'T... undersell your company
Likewise, don’t be too cautious and sell yourself short. You’ll likely miss out on deals if you’re too conservative about what you can achieve. See the data point above – if you enter each negotiation with reliable data, you will know what commitments you can make based on previous demand and volume.
DON'T... rely on just one supplier
Many TMCs rely on good relationships with several suppliers, so don’t just rely on securing one good deal. Negotiate with several airlines so that you are not vulnerable to the actions of one supplier.
DON'T... hide business shortcomings
Strong relationships are built on a foundation of trust. Withholding negative information about your business or its performance could bite you. Of course, the best deals are often reached if you can deliver sales volume. If you have not met previous commitments, have an open and honest dialogue and devise a collaborative way to solve any challenges.
DON'T... burn bridges
Didn’t get what you wanted? 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 different ways? You’re likely to be dealing with this airline again and again – make sure you’re set up for success next time.