Savings for Corporate Domestic Air Travel vs published prices on downward slide

| 0 Comments
trend_down.jpg

Are travel management companies causing increased travel costs? One of the measures used for benchmarking Corporate Air travel is the average savings achieved against the published fares and, while organisations recognise that this savings methodology is not necessarily the best, it has been applied consistently and is useful to track savings over time.

 
The graph below shows the average savings achieved across a wide range of SA corporations in various industry sectors:  (Purchasing Index (PI) has been using this as a method to benchmark domestic air travel for SA organisations for a number of years.) The trend in savings applied to each organisation that participated in the PI benchmarks - all organisational savings increased in the period June to September 2006, fell in February to April 2007 and rose again in July to October 2007.

Air ticket savings.png
Travel Management companies the cause?

"What was the cause of this trend?" Asks Alan Low, MD at Purchasing Index. He told SmartProcurement that "All participants use Travel Management Companies (TMC): Were the TMCs attempting to increase their income towards the end of the year (by increasing the overrides from the main airlines)?  If that is the case, how can client organisations be sure that TMCs are helping to enforce cost management in domestic air travel spend?  Or, perhaps, it is partly as a result of the volume of leisure traffic in the summer months?"

Thumbnail image for Thumbnail image for Alan Low.png"In any case organisations need to press their TMCs to explain why this is happening and to make their operational methods more transparent."

A further cause of lost savings opportunities is the high number of late or changed bookings that are still very prevalent in most SA organisations. Not all organisations measure ticket changes, but some of the findings are:
•    up to 55% of initial itineraries change, and
•    up to 50% of issued tickets change.
Organisations that are able to book in advance regularly show the highest savings achieved in PI benchmark reports.

In addition, use of low cost airlines can materially increase savings. With the increasing number of daily flights available on weekday major domestic routes, PI expects more organisations to change their internal policies for certain types of travel to take advantage of these reduced airfares.

Alan Low can be contacted  on
Cell: +27 84 890 0005
Email: alan@pricetrak.co.za

Leave a comment


 

 

Career opportunites

Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management
Job purpose We are looking for a Procurement

Fresh Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Jnr - Mid Level), Supply Chain Planning, Based

Groceries Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Mid Level) Supply Chain Planning, Based at Kenilworth,

Category Implementation Manager

  • >500 000 Gauteng Permanent Projects / Category Management Supply Chain
As an Executive Search and Career Consultant specializing

Head of Procurement

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Regional Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Director

  • >500 000 KwaZulu Natal Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Specialist

  • >500 000 Buyer Gauteng Permanent Procurement Officer / Specialist
As an Executive Search and Career Consultant specializing

Senior Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing Supply Chain
As an Executive Search and Career Consultant specializing

Indirect Sourcing Programme Manager

  • >500 000 Contract Projects / Category Management Strategic Sourcing Western Cape
As an Executive Search and Career Consultant specializing

Deputy Chief Commercial Officer

  • >500 000 Contract Gauteng Procurement Management Supplier / Business Development
As an Executive Search and Career Consultant specializing

GROUP PROCUREMENT MANAGER

  • Gauteng Permanent Procurement Management Supplier / Business Development
Operating out of Johannesburg, this is a key

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is