About

A leading multinational financial services company partnered with Areka to consolidate and enhance its air program, ensuring alignment with a rapidly evolving market. This transformation addressed key challenges such as distribution channel shifts, sustainability goals, and rising public fares. The client is a global financial company with a comprehensive travel program spanning North America, Europe, Asia, and Australia.

Ambition

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

• Rising Costs: A significant increase in published fares was inflating overall travel expenses.
• Fragmented Programs: Two separate airline programs for different client entities limited the company’s ability to leverage its total travel spend for stronger negotiations.
• Outdated design: The existing airline program was no longer aligned with travelers' evolving needs and the changing market landscape.

Action

Areka helped the company refine its air strategy and conduct targeted negotiations with ten major airlines. The consolidation of the two airline programs required a strategic approach to balance the distinct needs of each entity.

To support supplier negotiations, Areka developed precise requests backed by well-reasoned justifications. Airlines were encouraged to submit highly competitive pricing and address two emerging areas of opportunity:

1. New Distribution Capability (NDC) Integration

The industry-wide shift from EDIFACT to NDC content distribution presented significant challenges, including variations in available content across suppliers and increased GDS surcharges. Areka challenged suppliers to guarantee that the airlines’ distribution investments would not negatively impact their client from financial, service, or content perspectives.

2. Sustainable Aviation Fuel (SAF) Initiatives

With corporate sustainability goals in place, the client aimed to reduce CO2 emissions not only by traveling less but also by making more sustainable choices. Areka encouraged suppliers to present strategies that aligned with these objectives.

Approach

Areka’s unique approach was instrumental in delivering a successful outcome:

• Data-Driven Decision Making: Benchmarking insights, structured rationales, and strategic guidance helped secure highly competitive offers.
• Tailored Yet Unified Strategy: Each entity’s unique requirements were met within a cohesive global initiative.
• Market-Responsive Sourcing: The initiative reflected the company’s evolving priorities and broader industry trends.

Achievement

• 10 airlines engaged, with contracts secured for each entity
• Nearly 90% of airline spend now benefits from negotiated discounts
• Projected incremental savings of $220K over existing contracts
• Three supplier offers ranked as best-in-class based on Areka benchmarks
• Stronger alignment with NDC and SAF goals, with new supplier commitments