concur copyright © 2010 airline ancillary fees ellen trotochaud sr. director, analytics and vendor...

Concur Copyright © 2010

Airline Ancillary Fees

Ellen TrotochaudSr. Director, Analytics and Vendor RelationsConcurSeptember 9, 2010


Agenda

Ancillary Fees – Status Quo

Solutions Discussed

Your Role

Q&A


Ancillary Fees Include

Checked bags

Onboard internet access

In-flight meals & beverages

Preferred seating

Airline club access

Upgrades

Standby fees

Overhead bin space

Pillows & blankets

Seat assignment fees

Onboard entertainment


The Cost - $7.8B collected in 2009 alone and rising

Prices change frequently

Airlines have different products

E.g. Spirit recently announced fees to use onboard overhead bin space

British Air charges for advance seat assignment

Corporations are trying to understand the impact of these fees

Some studies show that ancillary fees represents only 1% of air costs*, some up to 30%**

Latest Concur study shows the cost at 2.3% of air cost

Many fees are waived for elite flyers

What is considered an ancillary fee?

Are ticket related fees, e.g., change fees, even considered ancillary?* TRX (as reported in The Beat) **NBTA 2010 U.S. Business Travel Buyers' Cost Forecast.

It is difficult to quantify the cost of ancillary fees:


Airlines have unbundled services – Pay for what you use


Bundled Fee Packages - Now airlines are bundling fees

Not all bundled fee packages included the same ancillary charges:

This creates added layers of difficulty for managing policy

Example: United offers several packages today but some include club passes which are typically not allowed in a travel policy. But how would a corporate travel manager know?

Each airlines bundled packages include different fees

Would you like to value size that?


Ancillary Fees – What is the impact on your program?

Source: Deloitte


Everyone is working towards a solution – but not together!Developing EMDs (3Q10)

Has introduced standardized codes for ancillary fees

Has set a deadline to standardize fees in 2012

GDS’s

are working on building merchandizing platforms


Industry Proposed Solution and AlternativesTwo Parallel Paths: PoS and Credit Card Reporting


Considerations

Will the Government step in?


Data on Fees Provided to Card Companies - CO

P. 12


Data on Fees Provided to Card Companies - UA

P. 13


Data on Fees Provided to Card Companies - AA

P. 14

?


Concur’s Solution for Reporting of Ancillary Fees

• Concur identifies a charge coming from an airline based on merchant code or employee entry if not using a card feed

• If a charge is under a company-defined amount, the expense type is automatically entered into the expense report as “other airline fee”

• The employee is prompted to choose one of six sub-fee expense types: Baggage, Upgrades, Seats, Airline Club, On Board, Other

• Policy audit rules can be associated with each of the fee types

• Fee reporting available


Party of Three – Silver Bullet

Collaboration in place between AirPlus, Concur and Continental Airlines to find a solution

Weekly calls to discuss changes and announcements

Technical calls to review possible solutions

Communication strategy to spread the word and get maximum visibility


Critical Components for a Solution

P. 17

Standardization across the industry

Airlines sending the data in a standard format differentiating for all types of fees

The data needs to be the same regardless of point of purchase

Ancillary fees need to match to the original ticket

Transparency of services required throughout the buying cycle

Point of Sale support of fees are more complex and may take longer to evolve

Focus on corporate card solution can be a quick resolution


What are your thoughts?

Is it important to you to have visibility into these fees?

Are all fees of equal importance?

What information do you need and what will you do with it?

Who needs information regarding fees?

Where will the decision to accept a service for a fee be made…during the original booking process, pre-trip, during the trip or on-board?


What are your thoughts?

Do you want to be able to charge fees back to a lodged/ghost card?

Is it important to you to be able to negotiate these fees?

Your average ticket price may stay the same or even decline but the total cost of air may go up.How do you explain that to your CFO?


Voice Your Opinion

Remember YOU have a voice

Share your ideas with the industry-Talk with your vendors

Urge for a common solution to be found to resolve this issue

Encourage the development of a total cost calculator to provide greater transparency to what fees would be charged - help make better buying decisions


Things to Keep In Mind

Ancillary fees are here to stay

This not just a domestic issue , it will continue to grow globally

Elite flyers will not be exempt from all of the fees

It will most likely get worse before it gets better

concur copyright © 2010 airline ancillary fees ellen trotochaud sr. director, analytics and vendor...

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