Big Flight Discounts for Small Businesses
Are big flight discounts out of reach for small businesses? Industry experts Murielle DiDomenicantonio and Susan Grant air their opinions.
Murielle DiDomenicantonio, executive assistant to the CEO and liaison officer of the board at Co-op Atlantic, coopatlantic.ca
My responsibilities at Co-op Atlantic, a wholesaler (food, agriculture and energy) second-tier cooperative in the Atlantic Region, include coordinating board meetings and corporate events. I also book and authorize travel for approximately 50 employees and executives, processing approximately 250 trips a year, mostly domestic and some U.S. We use a travel service company to make the reservations.
I feel that the airlines are not sensitive to the issues faced by organizations like ours, those that have less than what the airlines consider high volume business. We are excluded from corporate rates and other discounts. We are treated like individual (i.e., non-business) travellers, being left to hunt for seat sales that don’t always work for business travellers who need to be in a certain place at a specific time.
The airline booking procedures are designed in such a way that instant decisions must be made or we risk being charged more, sometimes double or above, if we don’t take the offering immediately. Instant decisions are extremely difficult because travellers’ schedules must be double-checked to avoid conflicts, and budgets need to be approved.
Sometimes we’re stuck with the outrageous cost of regular fares. After a fare is booked, if we need to make a change, we are charged very costly fees. In the case of cancellations, we are stuck with credits held by the airline, which sometimes don’t amount to much. For example, we had a $300 credit for a recent cancellation, but after the fees and the fare change, we only ended up with $9 off the cost of the flight.
Out of sheer frustration we have started to hold webinar meetings, which has greatly reduced our travel costs. I’m sure this trend will continue and become more regular as the cost of travel keeps going up, and as the options offered by the airlines continue to fall short of what customers like us need.
I believe there are many other companies in our position, those that book hundreds of trips a year, but with less than 10 travellers. It seems to me that as a united group, companies like ours could be a huge—and untapped—revenue source for the airlines, if they’d only give us some viable options.
As a starting point, here are some suggestions for how the airlines can better serve their business clients (and by that I mean all of us, not just the mega corporations): 1. Eliminate change fees, 2. Offer discounts to companies that have frequent business travellers and 3. Ensure that flight credits pair with the cities that are frequented by the business travellers.
I’m wondering how many other planners are faced with these issues on a daily basis? Who else is being forced to find other means of holding meetings in order to meet company travel budgets?*
Susan Grant, regional general manager for Passenger Sales based in Atlantic Canada, spent 20 years in pricing, revenue management and network planning before joining the sales team. Her current responsibilities include corporate and travel agency sales, business development and community relations. aircanada.com
Air Canada recognizes small and medium-size businesses and has designed several tailored programs including Rewards for Small Business, the American Express Aeroplan Plus Corporate Card and Flight Pass for Business.
Rewards for Small Business is an online reward program that allows all companies with Canadian tax identifications to earn rewards and complementary services on Air Canada. Benefits include discounts on travel, complementary upgrades, seat selection and lounge access. To access the program, company administrators (not planners) must complete the enrolment form on the website. Discounts range from two per cent to five per cent depending on the company's annual spend.
Rewards for Small Business customers can increase savings with the American Express Aeroplan Plus Corporate Card, which offers cash back on eligible purchases. In order to qualify, you need a minimum annual purchase of $25,000 on Air Canada and a minimum annual spend of $200,000 on the card. With both programs, you can save up to nine per cent if you spend in excess of $150,000 per year.
A Flight Pass for individuals (and Flight Pass for Business) is a prepaid package of one-way flight credits. Individuals can choose Tango, Tango Plus, Latitude or Executive fare options for over 30 geographic zones; wallet sizes range from four flight credits to unlimited flight credits. Flight Pass for Business is available for over 20 geographic zones with wallet sizes of 30 to 200 credits for eight to 50 travellers.
The benefits for both programs are: cost savings by buying in bulk (the amount saved depends on when the passenger is booking and on inventory levels), price predictability with fares locked-in for one year, and the flexibility of returning flight credits back to the wallet if travel plans change. The credit price includes all fees, surcharges and taxes. Latitude Flight Passes also provide complementary upgrades, subject to availability, to Air Canada’s Executive Class service.
Air Canada frequently evaluates the Flight Pass program and is open to reviewing it to ensure it remains relevant and meets customer requirements.
In order to keep prices low, Tango fares are non-refundable, require change fees, do not include seat selection and earn fewer Aeroplan Miles. Tango Plus fares have enhanced features while Latitude and Executive First fares offer full flexibility for those whose travel plans change frequently, plus 100 per cent Status Miles, increased baggage allowance and other benefits.
Forecasting models are used to determine how much inventory should be sold at each price point. Once the seats allocated to Tango or Tango Plus are sold out, the price goes up. It’s a very dynamic process and inventory allocations change frequently, which also reflects supply and demand among other factors. Air Canada aims to be price competitive in every market.*
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