The client is a multinational financial company with a global travel program spanning North America, Europe, Asia and Australia.

Challenge

This company’s travel team identified three main problems related to the management of their airline spend:

• A significant increase in published fares inflating the company travel spend
• Distinct airline programs for two client entities hindered the company's ability to leverage its overall travel spend for optimal negotiations
• Their airline program was no longer in sync with the changing needs of travelers and the dynamics of the market

Response

Areka supported the company in updating its overall air strategy and targeted negotiations with ten (10) carriers. To consolidate two air programs, it was essential to preserve the distinct needs of each entity in our negotiations. To support supplier discussions, we crafted precise requests that included detailed rationales.  Airlines were encouraged to offer the most competitive prices possible and challenged to address two areas of emerging opportunity.

NDC (New Distribution Capability):

The transition from EDIFACT to NDC content distribution impacted our client in several ways. Disparate supplier strategies not only impacted the content available through traditional channels, but it also resulted in a notable increase in GDS surcharges on some bookings.

Areka challenged suppliers to guarantee their client would not be negatively impacted by the airline’s internal investments in new distribution channels from three angles, financial, service and content.

SAF (Sustainable Aviation Fuels):

Our client set targets to reduce their CO₂ emissions by traveling less, and importantly, by consuming differently. Suppliers were encouraged to outline strategies supporting these goals.

Following submissions, Areka analyzed competitiveness and alignment with each entity’s needs, including factors such as the percentage of spend covered by discounts and the savings generated by the offers for each entity.  In addition, we provided risk-benefit analysis of proposed SAF co-financing models to support decision-making.

Unique approach

Areka’s support was highly valued:

1. With benchmarking data, well-presented rationales, and decision support, Areka helped the company secure highly competitive offers.
2. The needs of each entity were supported under the umbrella of a unified global initiative.
3. The sourcing initiative reflected updated company priorities and industry developments.

Results & key metrics

• 10 airlines were solicited and contracts secured for each entity
• Nearly 90% of the company’s airline spend is now covered by a discount
• Negotiations are forecasted to yield US$ 220k of incremental savings over current contracts
• 3 offers ranked as best-in-class based on Areka benchmarks
• New supplier support of the company’s NDC and SAF goals