Leading TMCs, online agencies and GDSs have come together to support plans to implement industry-wide technology standards which enable shopping, booking, payment and reporting of airline ancillary services.

Revenues from airlines’ ancillary fees for such services as seat assignment and checked baggage have been growing at staggering rates. For example, according to the Department of Transportation US airline revenue from so-called ancillary fees rose 42% to $7.8 billion in 2009. For travel managers the difficulty has been as much in identifying and managing the total cost of the ticket as in the cost itself. Technology enhancements will be putting an end to that.

Both corporate and travel management companies will be able to make use of common and recently launched technologies such as EMD (electronic miscellaneous documents) to include confirmation and charging for ancillary products within the GDS booking. This means that data would be integrated into the TMC’s back office system; the corporate would receive full data, and there would be full reconciliation and payment through the ARC and BSP systems.

An industry standard - as proposed by CWT and Sabre, among others - will enable airlines and travel management companies to sell ancillary products seamlessly and companies to optimise their business travel programs by better anticipating and tracking their full air spend.

Why it matters

• Gathering full and accurate data on air ancillary revenue spend will become less challenging for travel managers Unbundling created new obstacles in effective management of corporate travel programs because of the difficulty in collecting quality data. The practice proved very lucrative for a struggling airline industry so it grew quickly before technology and systems were in place to manage it.
  
  
• Ancillary air revenue being captured in the booking system will facilitate data capture More accurate management information increases the ability to purchase and manage effectively.
  
  
• Ancillary air spend may remain difficult to identify consistently Until all airlines have systems in place which enable the booking of extras to be captured in a GDS booking, some spend will be included in the GDS ticket cost while some may go onto a cards as a general travel expense.
  
• Unbundling should increase the transparency of the cost of air travel Clear understanding of spend facilitates decision-making. More detailed information on the source of costs should improve management and supplier negotiations.
  
• Travel policy must take account of unbundled air fares Company policy must be adjusted to state clearly which ancillary products travelers are entitled to purchase.

What to look for in the future

• Managing air spend will mimic hotel spend; i.e., the room is only part of the total accommodation cost, the flight will be only part of the total transport cost This will extend the demand for folio data from being a hotel issue to the airlines as well.
  
  
• Corporate card providers may look to offer enhanced data Rather than just the supplier and amount, expect some card companies to begin to offer fuller detail.
  
  
• An increase in the number of component parts increases the number of items which can potentially be marked up Suppliers and distributors love fuller disaggregation of what is being sold because it allows more opportunities to add to the total cost of an item