After the bailouts, now comes the marketing.
American Airlines is one of several U.S. carriers switching attention to getting corporate travelers back on to its planes. This follows a series of aviation sector bailouts — one of the more recent includes additional $9.5 billion for the payroll support program.
American has launched a promotion for its Business Extra loyalty program, designed for small businesses. It requires a minimum of just two employees.
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By enrolling and taking a flight before June 30, it is now rewarding enough points for a round-trip domestic ticket, or several cabin upgrades. The Business Extra scheme is shared by British Airways and Iberia.
Delta Air Lines, meanwhile, is waiving minimum requirements for its SkyBonus travel rewards program for small to medium companies.
They were previously required to spend $5,000 per year, and have five unique employee travelers sign up to qualify. That minimum spend amount is being waived this year and next.
Sky Bonus is also used by Air France, KLM, Alitalia, Aeromexico, Virgin Atlantic and Delta’s other codeshare partners.
Locking in Deals
Most airlines, like many suppliers, are also extending consumer loyalty tiers by up to two years. United Airlines is applying this principle to negotiated rates too.
In an email, seen by Skift, sent to “travel partners”, the airline said corporate fares were automatically being extended, even if the deal’s deadline had passed, and that corporates had a clean slate for future negotiations.
The marketing communication, signed by Jake Cefolia, senior vice president of worldwide sales, said: “I want you to know that we’re taking a practical view on how Covid-19 will impact our partnerships moving forward.
“A few weeks ago, we shared that we are willing to extend contracts for all of our corporate accounts that have contract expirations in 2020. In addition, today, I’m committing: You will continue to receive your negotiated discounts and amenities on future travel in 2020, regardless of your contract performance. When your contract comes up for renewal, we will not consider your 2020 contract performance as a factor in the process.
“These current circumstances are outside of your control, and you should not be held accountable for them. I hope this reassurance gives you fewer things to worry about in this uncertain time.”
Skift approached United, but it declined to comment on pricing issues.
Why Now?
With growing uncertainty about when the crisis will be over, and questions over our immunity to Covid-19, smaller businesses look like they’ll be the first passenger type to take to the skies again.
They’ll fly ahead of larger corporations, which have more stringent duty of care requirements. On the leisure side, more local forms of tourism are being tipped to emerge post-crisis.
But it’s a delicate situation. Many travel agencies and corporates have been caught in the ongoing row over whether airlines should refund cash, rather than vouchers and credit notes.
There are millions of dollars being held. For small companies, not having access to this money is a critical issue; travel managers at larger organizations have told Skift that dealing with vouchers are more of an administrative “pain” and are an analytical issue.
At Egencia, Expedia’s corporate travel agency division, new president Ariane Gorin said corporate customers were asking for help in simplifying the tracking of all the vouchers.
Smaller companies would probably prefer refunds to help manage cashflow during the crisis — but they can take heart from some carriers beginning to see things their way, including Emirates.
The carrier is preparing to process 150,000 refund requests per month, compared to 35,000 per month previously. It aims to clear its backlog by early August, and will be using money from its cash reserves
“We would like to assure our customers and trade partners that we will honor refunds, and that we are doing our best to speed things up,” said its president, Sir Tim Clark.
“The situation was dynamic in the early weeks of the pandemic, but we have since re-written our Covid-19 waiver policy into a simple, globally-applied approach that puts customers first. We’ve also proactively contacted those of our customers who had submitted earlier requests for refunds or booking changes, to let them know of the new options available to them.”
Those airlines that fast-track refunds might be the first to win businesses back onboard, and gain their loyalty in the future.
Competitive Landscape
One industry expert believes communications that automatically lock in client deals are a move to secure market share, and cut off competitor activity.
“I wouldn’t expect it to be so open,” said John Harvey, founder and chief marketing officer at Globalyse, referring to United’s missive. “They’re attempting to quieten things down and make everyone feel comfortable, that they’re not going to pull the rug out from under the deals.
“If you were a corporate client, with a private fare on a major destination, even though you’re not sending hundred people a month but are now sending five, would you still get access to your corporate discount? This message says you would.”
Crying Foul
This fight for market share is also spilling in to the travel management sector.
Corporate travel platform TripActions said competitors were falsely claiming it was “unfortunately no longer in business.”
On its company blog, the company added: “We’ve also heard that competitors are similarly lying to prospects and investors alike, stating that TripActions has ‘pulled out of Europe’ and ‘left the Asia Pacific market.’
“Rest assured, TripActions will be here long into the future to serve our 4,000-plus customers around the world with a continued local presence, offices and employees in EMEA, APAC and North America.”
As the industry recuperates from the initial shock of coronavirus, marketing messages tailored to the corporate sector are the green shoots the industry needs to see right now.
Europe’s carriers lag their U.S. counterparts as they work through complex state aid packages or seek out other forms of investment, but once in place travel managers can expect a similar focus on attractive deals and incentives. It’s a buyer’s market.
British Airways targeted corporates in its first major advertising campaign following the 9/11 attacks. As it said in the 2001 campaign: “If you won’t fly to your customers, someone else will.” It’s a statement worth repeating.
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Airlines Turn to Corp Travel Pitches After Securing Bailouts - Skift
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