Consolidation key to cutting costs

Consolidation key to cutting costs
By admin

Carlson Wagonlit Travel has urged travel managers to use preferred suppliers to optimise savings on air travel.

The travel management firm’s 2012 Travel Management Priorities research showed savings of 8% were possible through consolidation of air sourcing.

“One of the basic principles of air sourcing is that the more business a company can commit to an airline, the better the discounts it can obtain,” CWT said.

Shifting to low cost carriers could also help companies to slash costs by around 11%, but the report underscored the “significant trade-offs” involved in making the switch.

Instead, it advised looking for ad-hoc savings through low cost carriers “while ensuring they do not erode the preferred carrier program”.

Ancillary charges and fuel surcharges were highlighted as key costs, accounting for 5% to 10% and 7% to 12% of the corporate air budget respectively.

The report advised negotiating these costs where possible.

Choosing restricted fares over flexible fares could generate savings of 30% to 40%, with earlier bookings also resulting in significantly lower prices.

“The main challenge is getting travellers to book earlier than they do,” the report said. It suggested imposing a 14-day deadline to ensure savings.

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