Brad Seitz @ Topaz

Does the lowest logical airfare matter anymore?

I have read with great interest lately people writing about the demise of the lowest logical airfare for business travel.  I have read and thought about this subject for many weeks, thinking about whom writes this, and the reality of it.  Could it be true?  Is the end of the low airfare near?

I do not think so.  And let me share with you why.

The basic premise of running a business is to create profits.  Profits are created for the shareholders or owners (I know they are really the same) by increasing revenues and decreasing expenses.  Leaders and owners of these companies have been known to be the most frugal humans on the planet.  By example, Warren Buffett drove a used car for years until just a few years ago when he purchased his first new car, a Cadillac (paid in cash, of course). 

The premise that employees would be allowed to travel on more expensive airfares to accommodate things such as airline preference, shorter flight times, non-stops over connections, class of service, to name a few, just does not sit well with me.  Every corporation I have worked with has a policy based on a set of standards and preferences that balances cost with employee preference.  To let everyone do what they want has proven to increase costs and reduce profits, a violation of business 101.

In addition, I believe every business travel policy is evolutionary.  It changes, it grows, it gets smaller - it adapts to the environment of the company and the outside business environment.  When the largest expense item after personnel and cost of goods sold is left un-managed or left to the decision of employees, you are faced with increased costs and decreased profits.  But a travel policy and the adaptation of lowest logical airfare ensures that when employees do travel on business they are doing it at the lowest possible cost to the company.

So who writes all this stuff about the demise of the lowest logical airfare?  I'm not sure - new players in the industry, or maybe business leaders who are trying to sell their product based on a new set of parameters.  In the end, what I write or what anyone writes really has nothing to do with what will happen - because, like always, the one writing history will be the customers - and the ones that pay for business travel are the leaders of the companies that pay for the tickets.

I expect that in the end the ideal of lowest logical airfare will remain the standard for business travel.  It will get more complicated with various channels and ancillary fees, but flying on business must be at the most cost effective manner possible for the businesses of the world.

The Sports Fan in Society: Harnessing the Passion

I had the distinct pleasure of attending the Orange Bowl this year.  It was the first time I have attended a major college bowl game during my lifetime. But like any typical male, I have watched many events from the comfort of my living room.  And some live too.

Being there gives you a very unique viewpoint of the passion that is present with both the teams as well as the fans.  For a moment let's just forget about the teams and their passion.  When you play the game you must have the passion.  When you cheer on your team, that passion is a little different.

I realized this a few years ago when I was told fans had been killed at a soccer (fotball) match in Rome Italy when the two teams of Rome played each other.  AS Roma v Lazio brings out the passion in both their fans.  So much Italian passion in fact, there are 12 foot high Plexiglas barriers separating the two fan sections from each other.  Keep the passion in one section please.  Of course, getting to your seats could be an issue, as some fans found out one year.

At the Orange Bowl, when watching the replay of a botched pass play, there became a heated "discussion" between a Clemson Fan and a West Virginia Fan close to my seats.  No flag on the play was discussed face to face, no doubt with some saliva spraying.  Wow, I thought, what an important point.  Of course, this was early in the game - by halftime nothing really mattered.  But at the time these two individuals really felt strongly about their individual points.  Do they do this all the time, even outside of football games?

However, I have given much thought to the ideal that sports create a passion that is not found anywhere else.  Rarely do you see this passion in the workplace.  At home, we all forgo arguments just to keep the peace.  But is this really a good use of our passion?  Does the intensity that we see during sports events need to be exhibited in other places in our life?  Would we have a more exciting workplace if we showed the same passion in our jobs?  Would our world be better as a result?

I am not sure - but when it comes down to it, using that much energy and passion on a sporting event is kind of a waste.  I think we can use it towards making our lives and our worlds better places.

My Predictions for 2012: The good, The Bad and the Ugly!

I love this time of year.  It is the new beginning for many of us.  I personally look back at the previous year for about five minutes then it is all about the future.  What is going to happen next year?  We hope that growth and prosperity will rule the airwaves and the nations of the world.  But there will be a few additional things that will happen in our industry.  This is what I think:

1. American Airlines and US Airways will merge:  American Airlines will come out of bankruptcy and will start talking to US Airways about merging.  Before the end of the year they will combine forces and take on Delta and United.  Then the fun begins.  Or is that pain?
2. United Airlines will grow, Delta Air Lines will shrink, the new AA/US will remain flat:  In 2012 the new United Airlines will start flex their muscles since the merger, and see growth in passenger traffic; Delta will have some competitive issues (more below); and American and US will just be getting started and will feel some of the aftereffects of bankruptcy.
3. Sabre will make peace:  I think that since the bankruptcy proceedings, we have had a view into the operations at American Airlines and soon there will be peace between the airlines and the GDS’s.  The real issue left to be answered is who will pay for the cost of distribution?
4. Corporations will see their costs rise:  Corporate travel departments will start to see increases in distribution costs.  And really it will be a flow through from their TMC’s.  Using a GDS costs more, TMC’s cannot absorb the costs, corporate travel departments bear the additional costs.
5. Strikes will threaten the airlines:  Last year at GBTA there were pilots outside of the convention center sharing publicly with all of us their lack of contracts and desire for more compensation.  It made me think that as the airlines get bigger, the power of the unions and employees gets bigger, and the threat of work stoppage and massive headaches will be present. 
6. No more PJ’s on airplanes:  The dress codes for airlines will start – and the more and more frequent sightings of pajamas on airlines will stop.  Sir/Madam, you have been denied boarding because your pants should only be worn in your bedroom.
7. Southwest will start charging for bags:  The competitive advantage they think they have will be overcome by the tempting thought of all those additional revenues.  There is nothing like more revenue in the airline business.
8. Tony D’Astolfo will rise again:  The surprise (at least to me) departure of Tony from Rearden is not the ending of the wit, smile, perspective and intelligence of Tony from our industry.  He will rise again.  He is in fact the Honey Badger of the travel industry. 
9. Southwest takes over Airtran in Atlanta and the wars begin:  This will be interesting.  But, it will also be bloody.  The question in my mind will be who will Delta focus on?  United and American and US airlines will be watching the hometown war.  Can Delta win again?
10. Lowest Logical Airfares will rise again:  There has been a lot of press lately about the fact that travelers are dropping the concept of lowest logical airfares and in fact focused on other things – what I say is bull – corporations care about doing effective business at the lowest cost – and that is what travel managers will be focused on providing.
11. Merge the associations, take two:  Time to get the associations to talk to each other again, and to merge.  A larger voice for our industry is a good thing – government’s all over the world will be more likely to listen, travel managers will NOT have to make difficult choices, and marketing and sales expenses to  are managed better.  GBTA and ACTE, go have a coffee together.
12. Tripit will continue to piss off travel managers:  Everyone client I speak to tells me this time and time again.  So will something happen to appease them?
13. Do you have to relieve yourself on an airplane?  Bring your credit card because you are about to be charged to use the toilets.  Swipe your card for the right to use the facilities.  I am going to go out on a limb and say $2 per usage.
14. Car Rentals will get more into the ancillary fee game:  I think ground transportation companies have to figure out how to get into the game of more fees for their rentals.  The problem is for me I have no idea what more they can charge for.  Maybe if there is a little dirt on the car they charge for a car wash?  Who knows but get ready to pay more.
15. Hotel Rates will go up moderately in most places:  The economy is just not good enough yet to drive large price increases.  They want to get more from your pocket – but they have to balance that with filling the rooms.   Maybe they fill the room cheaply and you have to pay for little things.  Like a key.

So there you have it – do you have others?  Feel free to share!  Best wishes to everyone for a great 2012 and let’s hope not all of these predictions come true!