& Marine. The Value of. A white paper for the GBTA Europe Oil, Gas and Marine Travel Symposium October 2013, Copenhagen.
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1 The Value of Offshore & Marine travel A white paper for the GBTA Europe Oil, Gas and Marine Travel Symposium October 2013, Copenhagen Find ATPI on LinkedIn
2 Research conducted amongst senior decision makers within the energy sector prior to the 2013 SPE Offshore Exhibition in Aberdeen showed that almost a third of companies rated cost management as top of the list of concerns for offshore travel over the next 12 months and yet nearly 40 percent of respondents said that they were unaware that some travel management companies (TMCs) offered preferential rates for the sector or that specialist fares existed at all. What developments lie ahead for the distribution of offshore and marine specialist fares in the future and how can you ensure you optimise the value of your travel budget in this competitive sector?
3 The evolution of specialist fares for the offshore and marine industry has been quite remarkable. If we look back to the beginning where the concept originated in Greece for the shipping industry, airlines identified A number of airlines including Air France, British Airways and KLM were pioneers of specialist net fares for the industry in the late 1970 s and really grasped the specific needs of the shipping market, playing a key part in its development and expanding the access of crews from Asia and Eastern Europe. Distribution of fares was originally controlled through a handful of agents so that airlines could ensure that fares were only available to eligible travellers. Agents would ensure the correct documentation was in place and confirm eligibility so there was no dilution of business travel revenue for the airlines. the need for specialist fares for crews to meet their specific needs. Significantly reduced fares, fully flexible tickets that could be adjusted without financial penalty and increased baggage allowance to accommodate the fact Over the years airlines have had a real opportunity to expand their specialist fares. The middle eastern carriers such as Qatar and Etihad in particular have played a significant role in marine crew travel and really embraced the opportunity for this niche market. This all changed when certain airlines started to distribute their specialist fares through many more agents and with more agents involved, control and eligibility became a real issue. In response airlines started to contract distribution and reduce the that crew would be away for several weeks or even months. In addition, other airlines soon recognised a new market opportunity in specialist travel for the offshore industry. A new category of fares number of agents distributing these specialist fares. for offshore travel was introduced many years later with fares broadly the same as marine travel but with different eligibility criteria for the different market segments.
4 What are the options for accessing these specialist fares? It s no secret that airlines yield management programmes offer different net fares in different markets depending on what the market will bear, others have Accessing this variable content can be a challenge however a combination of a single GDS and a global technology platform which gives the travel buyer the best opportunity to access to air fares globally and the best deals available in the different local markets. That is where the benefit of a specialist TMC with access to all deals available in many different markets reaps significant rewards. It is important to have an agent who will have high volumes in locations all around the world to access the best fares and have strong local awareness in the specific markets. gone to single global pricing. And currency variations are an influencing factor. There are certain deals in single currency available but are not shown on the GDS (Global Distribution Systems), these are especially prevalent in Understandably, large corporations want to negotiate and control their own deals for high density routes but when it comes to secondary and tertiary routes TMCs have an important role to play in accessing optimal deals and the best available prices for air fares. And for medium to large size corporations who do not Asia. have high density deals in place the ability to globally source airfares is extremely important for cost control management.
5 Working together is the best solution. Airlines, TMCs and corporations need to work together to ensure the right solutions are offered for the particular specialist niche markets of marine and offshore travellers. And it is ATP Instone in collaboration with a number of airlines is working to ensure that vigorous checking of eligibility is in place so that the system is not abused. New technology recently introduced will make sure eligibility is correct and check eligibility on a greater frequency at the airport. Air France and KLM are leading the trend The development of new technology such as ATPI s CrewHub, an integrated technology platform that interfaces with HR/crew management systems, aids travel policy compliance and ensures that travellers correct documentation is automatically stored in the PNR (Passenger Name Record). Airlines then have instant electronic back to basics. Eligibility for these specialist fares has to be properly and vigorously checked; it is not in the industry s interests to utilise fares inappropriately, abuse of the system will only drive up costs. with a system in place at Paris CDG. access to check traveller eligibility. This technology will also help drive and control deals. The processes in place will ensure airlines are comfortable that the fares are going to the right people and corporations know they are getting the best deals in the market. Airlines historically were not so focussed on the offshore and marine travel markets but as traffic volumes and revenues have increased there has been significantly more interest in the sector. This is now developing further as the industry needs change.
6 One significant area of focus for corporations is the recruitment and retention of experienced staff in the competitive offshore and marine market where there is a shortage of key senior and technical personnel. With travel being such an important factor, part of many corporations retention strategy is to move to business class travel and/or lounge access. Another key development is special check in desks for crew travel. Etihad has recently opened a dedicated marine check-in at Manila s Ninoy Aquino International Airport for seafarers travelling in groups of ten or more. TMCs need to help airlines to meet the changing needs of the market and negotiate special fares for business class travel for eligible senior and technical personel and develop products to meet the needs of the industry. This will enable clients to offer a benefits package that attracts the right calibre of senior staff. Travel is a very personal and sensitive experience and provides an opportunity for corporations to differentiate themselves where recruitment of staff is an issue. Another new development for airlines is New Distribution Capability (NDC) recently introduced by IATA (International Air Transport Association). Airlines are challenged to find ways to improve yield and revenue through product differentiation. GDS s do not allow you to see difference in products at point of sale when you search for specific fares so decisions to book one fare over another is based predominantly on price. The NDC will allow more of the non-financial factors to be taken into consideration when making the decision to book such as availability of flat beds or in-cabin Wi-Fi. The system will have the ability to profile the traveller, through, for instance, a frequent flyer programme, giving the airline the opportunity to respond based on the profile of the traveller. If they have travelled on business class for the last few trips is there a possibility that only business class fares be offered? The issue here is that fares that airlines offer through NDC are priced on the actual travellers needs rather than corporation needs and more importantly not travel policy. Profiling is fine for individual travellers but can be an issue for corporations who want to control travel policy and airline deals. NDC is an attempt to get travellers to make the choice not the corporation and the industry needs to be wary of this. There is some merit and benefit but it can be a dangerous practice for corporate travel and potentially could start to unravel corporate travel policy and drive control from the TMC and corporation to the traveller. There are also some concerns about the new ways of distribution. Arguably this needs to be controlled through a corporation s strict travel policy with support of a TMC who can offer the best fares and has the specialist knowledge to source the best fares globally wherever they might be. As an industry it is important to be aware of NDC and we need to manage it effectively to ensure travel policy is adhered to and cost management is not compromised. Perhaps it is not what our industry needs?
7 We have seen a positive evolution of airlines identifying opportunities to supply specialist offshore and marine fares and this has become global with airlines and TMCs working together to identify demand. However the access to the inventory has become more fragmented. Not all content is available via all GDS s which raises compliancy issues and the new NDC potentially could further fragment access to content. Corporations therefore need to have strict control on travel policy but TMCs need to make sure they are The future of offshore and marine travel continues to lie with the tripartite relationship of airlines, TMCs and corporations. Airlines need to continue to meet the changing needs of the market working together with TMCs and corporations to provide the right products and distribution channels working with airlines to negotiate to meet the needs of the traveller. the right deals globally and not just in key markets for the industry.
8 To discuss travel for your shipping or energy business call +44 (0) or Find ATPI on LinkedIn
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