Biofuels are all the rage now. Earlier this month at the Berlin Airshow EADS demonstrated its ability to fly a small plane using 100% biofuel based on algae. But there are numerous solutions; Jatropha, Carmelina and even wood chips.
Forget about those frequent flier miles. Frequent flier miles add cost to the airfares your firm buys. And yes, firms have tried to cut those costs by stripping miles out of corporate fares, or by capturing employee-earned miles.
But it doesn’t work, for two reasons:
Bulk buying makes sense for many commodities, but not airfares. Why? Because it’s complex and expensive.
For many years debate has raged concerning the correct construction and use of international airline fares. The argument is all about interpretation and clever manipulation of rules which can result in travellers and their employers enjoying major savings if their agent is smart enough to know the "loopholes." Such intelligence was, and still should be, a key differentiator between savvy and average TMCs.
One of the primary reasons for the demise of commissions was the desire by airlines to reduce their distribution costs. They also felt it would take out an intermediary, bring them closer to their end customers and give themselves a competitive edge. Their strategy was not resisted by corporations who saw it as a way to commoditise this vexing and rather antique type of purchasing, or at least make it far more transparent. After all, experience showed them that stripping a product down to its component parts makes it far easier to negotiate lower prices. There were mixed feelings amongst travel management companies. It varied around the world from despair and anger to others who saw it as an opportunity to survive and thrive whilst their peers faltered under the pressure of having to justify their role in the supply chain.
The end result has proved to be fascinating and I am not sure if any of the key stakeholders got what they wanted out of it.
