New Fares and Discounts Highlight Value of Corporate Travel Management
CONTACT: Caleb Tiller | 703-684-0836 Ext. 138
Alexandria, VA (March 2, 2005) -- The National Business Travel Association (NBTA) today provided its members with an analysis of the changes network carriers made in January to their domestic airfares and fare structures. The study sheds light on the changes nationwide and the differences between carriers, aiding travel managers as they gauge the impact for their companies, inform their programs’ stakeholders and work with carrier partners to provide the best travel value to their organizations. It is available to NBTA members and will be updated each of the next six months.
The study uses fare data from more than 2,500 city pairs in December and February to examine each of the six network carrier’s average domestic fare changes system-wide, changes to full-fare coach (Y Class) fares, and fare changes in each booking class. It measures the level of complexity of each carrier’s fare structure by examining the number of fare basis codes per city pair and the number of fare basis codes per fare class. The compression of each carrier’s structure is examined by comparing the minimum fare within a city pair to the average minimum Y Class fare within the same city pair. The study also lists changes in average fares in ten key business city pair markets.
“When these fare changes went into effect, NBTA member travel managers immediately began assessing the impact on their programs and making any adjustments called for,” said NBTA President and CEO, Carol A. Devine, CCTE. “Now this in-depth analysis provides the big picture, so they can build upon their internal study with nationwide data. Travel managers continually deliver value by providing these services in a purchasing environment where change seems to be constant.”
Devine continued, “This is the first study of these fare changes to provide a nationwide analysis with this level of detail. NBTA members have asked for this type of resource, and as the premier association for corporate travel professionals, we are pleased to deliver. It’s these types of benefits make NBTA membership so valuable.”
Some of the key findings of the study are as follows:
- Average undiscounted domestic fares fell seven percent from December 29, 2004 to February 6, 2005, from $286 to $266.
- Average system-wide fare changes varied widely from carrier to carrier, from lower than one percent up to 11 percent.
- Fare changes varied more widely between booking classes, with some dropping by more than 40 percent and others not changing or even increasing.
- Fares in only five classes on three carriers showed average declines of more than 30 percent.
- Network carrier changes in the restrictions associated with many fares will mean the impact on corporate buying is greater than the changes in average fares. The most significant such change is a move away from a Saturday-night stay requirement to a one-night stay requirement. With looser restrictions, average business airfares will likely drop 10 percent or more beyond the average seven-percent drop in published rates, for a potential decrease of more than 17 percent.
- The average number of fare basis codes per carrier per city pair increased 32 percent from 75 to 99.
- Most corporate buyers will realize price reductions – but the degree will vary widely between companies.
- Carriers now offer multiple tiers of corporate discounts applicable to the “old” and “new” fares; some are tied to booking classes while others are tied to published ticket prices.
Devine said, “These complex shifts in the travel landscape make this industry exciting, and they underscore the importance of corporate travel management.”
This study, commissioned by NBTA to provide to its members, was conducted by Travel Analytics, Inc., under the direction of CEO Scott Gillespie.
Members of the media interested in obtaining a copy should contact Caleb Tiller at ctiller@nbta.org or 703-684-0836 ext. 138.
The National Business Travel Association is the source for critical information on the business travel industry. For more than 35 years, NBTA has dedicated itself to the professional development of its members through advocacy, education and training, and networking opportunities. NBTA represents over 2,500 corporate travel managers and travel service providers, who collectively manage and direct more than $170 billion of expenditures within the business travel industry.
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