Posted on March 20, 2012 by Corporate Traveller
For businesses that are keen to keep a tight reign on how much they pay for air travel, one of the proven strategies to reduce costs is advance purchase. Whether your business uses preferred carriers or has opted for an open sky policy, there are significant savings to be made on airfares by being prepared, planning ahead and booking early.
A recent Corporate Traveller study indicates that companies can save on average up to 54 per cent on the cost of their tickets by booking 21 days or more before their departure date. The 2011 study, which used fares for 12 major domestic routes, compared ticket prices for bookings made one day in advance, two to five days, six to 10 days, 11 to 20 days and more than 21 days in advance. Using a departure date of 5 July 2011, the study tracked advertised fares for flights between 6am and 8am.
The results clearly show that bookings made one day prior to the departure date were all significantly higher than the fares purchased three weeks earlier. The results indicate that a domestic ticket bought 21 days in advance of the departure date cost an average of $105.
- A ticket bought 11 – 20 days in advance of the departure date cost on average 17% more at $123;
- a ticket bought 6 – 10 days in advance of the departure date cost on average 38% more at $145;
- a ticket bought 2-5 days in advance of the departure date cost on average 43% more at $150 and
- a ticket bought 0 – 1 day in advance cost 116% more at $227.
It’s important to note that savings on domestic tickets across carriers will fluctuate throughout the year according to a range of factors such as demand and time of year, however the snapshot of fares used in this study is a good indication of how businesses can boost savings through forward planning. In addition, variations in ticket prices also reflect the differences in product and service offered by each airline.
Your travel manager can show you how to reduce your average ticket price by using an advance purchase policy. Whether your travellers fly with preferred airlines only or your business uses an open sky policy, there are still savings to be made, particularly if you are booking tickets for travel during peak periods.
Corporate Traveller’s study shows that average ticket prices during off-peak periods will almost always risetwo to fivedays prior to the departure date, with the lowest fare for the route generally advertised 21 days or more out from departure. During peak travel periods however, fares start to rise much sooner, making advance bookings a particularly important cost cutting strategy. In the lead up and during peak periods, such as Christmas, last minute fares can more than double. Research in 2011 shows that on some popular international leisure routes, ticket prices for key dates around Christmas rose by as much as 50 per cent by November.
You can enhance the way your people travel by including guidelines in your policy around advance purchase. Communicate your policy clearly and effectively to all your travellers and make sure they know what is expected of them. It is common for businesses to introduce a two week advance booking policy into their travel programs.
Corporate Traveller suggests giving consideration to what non-compliance measures will be taken if people do not adhere to your policy. Booking in advance isn’t always going to work in the case of emergencies and unforeseen events, but when travellers know an event is happening a few months or weeks ahead, best practice demonstrates it’s wise to book as early as possible.
There should be a common mindset in your company when it comes to advance bookings and educating your employees is a crucial part of this. Corporate Traveller can help you proactively educate your travellers on your policy and how it affects them, what your company’s goals are, the benefits of your travel policy and the savings that are achieved as a result of smarter travel behaviour.
To contact your travel manager for more information - click here!