Business Travel News - May 5, 2008 - (Page 6)

NEWS U.S.Airlines Accelerate Minimum-Stay Faring BY JAY BOEHMER PROFILES IN TRAVEL MANAGEMENT Novartis To Leverage New Global Travel Policy Novartis International recently began rolling ible, Novartis charges the air ticket transacout a global travel policy that will serve as tion fee back to each traveler’s corporate card. leverage in its inaugural global air bid The global policy first launched in the U.S. launched in March and in an ongoing revision pharmaceuticals division and the New York of its hotel program. corporate office last November. Eventually, The firm’s travel team tarit will cover all of Novartis’ gets a 100 percent agency 98,000 employees worldwide, compliance rate by taking a but the travel team has built hard-line approach, includflexibility for local operations, ing potential nonreimbursewhich are then reviewed and ment, against out-of-policy authorized by Basel, Switzerbookings made outside preland-based global category ferred channels. manager of business travel The new policy aims to David Coulson. achieve compliance through “We could focus only on savwell-defined and firm apings with the potential to delay proval procedures, most notravelers with less than hightably the “one-over-one” exquality service and numerous ception rule, which requires connections,” said Coulson. any non-lowest logical air“That is not in our travelers’ fare or out-of-policy bookinterests and certainly not in PAUL TOMASZESKI ings to be approved by the Novartis’ interest.” Novartis Pharmaceuticals traveler’s supervisor’s manThe company’s first global ager, who in a “relatively flat” air bid includes about 100,000 organization like Novartis is fairly high in the annual tickets issued in North America alone. management order, said Paul Tomaszeski, ex- Novartis sent out requests for proposals in ecutive director of Novartis Pharmaceuticals March and held a bidder’s conference. business support services. “When most trav“Part of what we are explaining within the elers hear what the process is for getting the RFP is that our new policy will really drive exception approved, they fly on the original our marketshare to preferred carriers,” in-policy flight,” he said. Tomaszeski said. “Carlson basically owns that For offline bookings, Carlson Wagonlit Trav- booking, and they are driving and selecting el agents receive travel reservation request the carrier and flight the traveler is going on, so it should align itself with our discounts and lowest logical airfare rules and drive share.” COMPANY: NOVARTIS A travel steering committee made up of senHEADQUARTERS: BASEL, SWITZERLAND ior-level executives, including the CEO, reANNUAL N.A. TICKETS ISSUED: 100,000 cently adopted a global category management role, and now takes a project approach to makinformation and provide an air itinerary with ing such policy changes as instituting a trackthe lowest logical airfare. ing process to measure compliance by country, Online transactions are subject to the one- division or department for key performance over-one rule as well. A dedicated agent in metrics like advance airfare purchase. CWT’s Canadian call center monitors online The company also is using CWT to push transactions made through Novartis’ CWT hotel program compliance, but has built in Horizon booking tool and will not issue a tick- exceptions for meetings. Tomaszeski’s team et for an out-of-policy request. tweaked the policy to move travelers to midTo further drive compliance, Novartis has tier hotels that “are suitable to business travreserved the right to deny reimbursement for el, but offer some favorable rates, last-room bookings not made through CWT agents or availability and late cancellation clauses.” —Seth Harris Horizon. To make transaction fees more vis- Major legacy carriers in April upped minimumstay requirements on some routes in an attempt to drive more revenue and push business travelers into higher fare buckets. Northwest Airlines said it rolled back some such fare restrictions on routes where it competes with US Airways, which did not match the change, but that American Airlines, Continental Airlines, Delta Air Lines and United Airlines further restricted minimum-stay requirements on some routes, particularly where low-cost carriers do not compete. Northwest said growing fuel costs are spurring airlines to seek new revenue opportunities in every corner. “Every network carrier is faced with extraordinarily high fuel costs and the need to find ways to offset that burden,” said Jim Cron, Northwest senior vice president of revenue management. “However, without widespread acceptance of these kinds of revenue enhancements, including very strategic segmentation of fares, we cannot sustain the inAccess the 2008 Business creases across the Travel Buyer’s Handbook board and remain see btnonline.com/handbook competitive. We will continue to look for other ways to increase revenues, in light of these record fuel costs.” Northwest raised minimum stays from zero or one night to two nights on many fares, while raising two-night minimum-stay fares to three. Airfare analysis conducted by Harrell Associates for Business Travel News confirmed some of those restrictions had taken hold. Evaluating nearly 3,000 fares on 300 routes for the same week that Northwest announced the policy change in April, U.S. airlines placed minimumstay requirements on 24 percent of domestic roundtrip tickets. Though the number is up only slightly from the 22 percent for the same period last year, airlines have upped the number of days required for the fare. While the number of one-day-stay fares slipped from 7 percent to 5 percent in April this year compared with last, and fares necessitating a twoday stay remained flat at 5 percent, fares requiring a three-day stay rose from 6 percent to 9 percent. Likewise, fares requiring a Saturday-night stay grew from 3 percent last year to 5 percent. Several domestic carriers earlier this year said they had reinstituted Saturday-night stay requirements in select markets, though the efforts were not matched en masse (BTNonline, Feb. 4). ■ jboehmer@btnonline.com ■ 6 Monday, May 5, 2008 www.BTNonline.com Business Travel News http://btnonline.com/handbook http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - May 5, 2008

Business Travel News - May 5, 2008
Contents
Inside Track
Profile
BTN Research
Aviation
Lodging
Travel Management
Travel Management Tech
Executive Dashboard
Corporate Travel World
Destinations

Business Travel News - May 5, 2008