Airlines are in Trouble

The airlines face the following challenges in that situation:

• Keep the flights full
• Avoid price wars
• Retain high service standards
• Reduce fuel consumption

Reducing fuel consumption demands a lot of investment spending to buy new planes and to improve fuel efficiency of older planes. And this in times of weakened banks and severe problems in the credit markets. All in all, this is not a time where you want to be an airline executive. But what does that mean for expats and people who have family relationships on more than one continent?

If you have family overseas and if you want to keep the relationships going, you cannot afford not to travel. On the other hand, you cannot hope that business travelers and tourists will fit the bill for higher costs alone, especially in times of slowing growth, low job security and high unemployment. But there are still good chances to find reasonable offers if you do some things right.

Stay Away from Peak Travel Days

Avoid high seasons like Christmas and summer vacations, if at all possible.
If you need to travel during high season, book early enough, but not too early. Most airlines have changed their rules, and they require now a payment and ticketing only almost immediately after a reservation is made. But if you book at the right time, you can still save several hundreds of Euros, especially compared to the prices of high-season-tickets a few days before the flight.
January and February are good months for buying summer vacation flight tickets, and for the Christmas season are February and March, or late summer good times to buy tickets.

Look Beyond Public Booking Engines

You should be aware, that for some destinations, especially in Africa and Asia, airlines create specials adapted to the needs of people visiting their relatives overseas. These special offers contain often better luggage allowances and some extra flexibility, e.g. the opportunity to rebook a flight after ticketing instead of a “no change, no refund” policy. Please be aware that those offers are typically not featured in public flight booking engines. Only selected travel agents receive special contracts from airlines to sell these tickets. The airlines do not pay commissions to their resellers. So the travel agent fee can undo the price advantage. But in this case you have still improved terms and someone who can assist you to change a flight if needed, while you are far away from the next airline branch office. So my advice is: Look for a travel agent who specializes in air tickets and whom you can trust, then build a long-term relationship with him.

If you are based in Germany, you may try as well our TailorMade TravelPlan

Incidents like the so called “volcano ashes flight ban” in Europe during the spring of 2010 are more severe than problems caused by weather conditions. A computer simulation signaled that time a high probability that dangerous particles stemming from a volcano in Iceland were present in the air. Obviously no government wanted to be responsible for a catastrophe caused by such particles. So they closed almost the complete European air space without any time frame for the end of the flight ban. After a number of days, and only in response to massive pressure from some of the biggest European airlines, governments bothered to check the real concentration of ashes in the air and reopened the air space gradually.
Pandemic diseases like SARS could also lead to such government actions. Riots may cause governments to close airspace and impede air travel as well. It is obvious, that air traffic chaos caused by political decisions is less predictable in scope and duration than problems resulting from weather conditions.

How to Protect Yourself?
What can you do to minimize the impact of such disruptions on you personally? You should take care of three aspects, which have a huge impact on your experience in case of travel chaos.

1. While you book the flight:
   If your journey runs smooth and without a problem, you do not need and will not miss a high quality score of your travel agency. You buy, pay and fly.
   But whenever a disruption occurs, you will feel a big difference between an overwhelmed customer service hotline and personalized service provided by your travel agent who receives timely information from the airlines, together with specific rules about changing schedules and refunding canceled tickets affected by the chaos. You will be in a position to discuss your options with a personal travel consultant – if you have one – and then to reach an informed decision accommodating your needs as much as possible.
2. Before departure of your Flight:
   You should try to confirm whether your plane will be flying on schedule before you go to the airport. In times of disruptions you should inquire already now about details and specific rules to postpone, reroute or cancel your flight. Then you decide what to do.
   The same applies before departure of the return flight. Check out, whether your flight operates according to the schedule, before hitting the road to the airport. Weight your options and decide to take the return flight as booked, to rebook or to use another option e.g. traveling by car or train. If you decide to use your flight in spite of the disruption, it is always good advice to have everything you really need in your hand luggage. Otherwise it may happen that imortant items are stuck in a stranded box half a continent away.
3. If you are hit by air traffic chaos on the road:
   From the moment you checked into your flight and received your boarding card, only the airline’s customer support staff can handle any inquiry. If you have missed a connection flight because the feeder flight was late, you need to contact the airline immediately and ask for a solution. They might offer a seat on another flight, possibly with another airline, or a hotel room and a seat one or more days later. Maybe you could finish your journey by rail, bus or car. In some cases the airline will even hire a taxi to bring you home.
   The same applies, if your luggage is missing. If you do not find a service official of the airline, ask an airport employee for support.

In Short:
Obviously it is better to avoid being directly affected by air traffic chaos. But if you booked your ticket through a good travel agency, your travel consultant will be an important source of information and advice, allowing you to take informed decisions. If a problem occurs after you started your flight, you have to rely for solutions on airline service staff. Ask for help immediately after the problem occurs.

Travel policies speed up the decision making process, provide transparency and provide a framework for effective delegation of booking decisions.
But every business, as small as it may be, should collect all information necessary for a meaningful cost-benefit analysis of a business trip. This is the only way for a business to ensure the right resource allocation to its travel needs. The same information helps to detect waste and to plan for an increase of resources, if needed.
Another task of any travel management system is the allocation of travel expenses to projects or customer relationships. This is a must, because otherwise it would be impossible to determine with certainty their profitability.
Only after these needs are satisfied, travel management has role in negotiating favorable terms and prices with service providers. The last step is then to book hotel rooms, air and train tickets, rental cars etc.
This is a very broad definition of the term “travel management”. Most travel managers will tell you that they do neither develop corporate travel policies nor do they evaluate the need of any business trip.
In a narrow sense travel management sorts the trips into predetermined categories. The travel manager organizes the trip then according to the rules laid out in the policies for the respective travel category. The information for accounting and controlling are generated automatically and transferred to the accounting department.
Accounting will sound an alert to a higher level of travel management as soon as certain events occur. This may be a significant rise of costs or the danger to overrun a budget. Another reason for an alarm may a big difference of costs between departments, which should be fairly similar. A sudden rise in costs for a single service category like hotels or flights may also trigger an alert. Upon such alerts a person on a higher level may analyze the reasons. He will check whether travel policies are correctly implemented and look into the need to adjust corporate policies.
There is another important benefit provided by a professionally organized travel management process: Detailed and up-to-date information is always available, if a need arises to evaluate the profitability of a project or customer relationship. The same data provide also a point of reference about travel related costs when the company prepares an offer for a new project or negotiates a new contract with a customer.

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Ask Your Contact
Chances are that you know somebody living at the place you are going to visit. If that is true, you can ask your contact to book a decent hotel for you. Communicate clearly, what kind of hotel you are looking for. Otherwise it could happen that you find yourself in the perfect hotel, but way out of your budget. Or you could end up in a hotel with quite reasonable rates, but lacking services like internet access or sport facilities. That can be annoying and expensive if you need them.

Always Book Hotels in Advance
If you do not have the luxury to ask a contact person familiar with your travel destination for a recommendation, you have other options.

1. You can do a web search for hotels at your travel destination, and give the hotel you chose a call.
2. A huge variety of hotel booking websites is at your service.
3. If you do not want to waste your time with researching hotels through the internet, use your travel agent.

Important thing: Do an advance reservation. Do not travel and look for a hotel after you reached your destination, if you are not keen to pay the highest available rate the hotel has listed. Hotel owners know that it is expensive and time consuming to shop for a room to stay, if you are a stranger in a city. If you want to get a reasonable room for a reasonable price, you must do hotel reservations before you travel.

Hotel Booking Websites
Hotel booking services through the web will offer you many different hotels, ranging from the budget hotel in the industrial area outside the city up to the prestigious and comfortable 5-star hotel at the best available location. If you are looking for a decently priced hotel with standard facilities and services, and you are not travelling to the center of nowhere, a hotel booking website can be a perfect option.
For most hotel reservations you should enter your credit card information as a guarantee. This way you keep your room when you arrive late. If you do not show up, they will charge you one night. A reservation without guarantee will usually be canceled, if you did not arrive by 6 p.m. There is no cancellation fee without payment guarantee, but neither a room if you arrive late.

Special Offers and Booking through Tour Operators
For some special offers or during peak seasons like trade exhibitions or holidays there may a cancellation fee, and a deadline after which you cannot cancel your room. If you book your hotel through a tour operator as part of a vacation package, you may also face restrictive cancel policies. As usual: Check the fine print.

Luxury Hotels
If you look for your favorite luxury hotel in a booking engine, you may or may not find it. The very best hotels provide not only superb locations and excellent services. They are also choosy about their guests and use a very high published price as a first filter to keep unwanted persons away. References, e.g. via corporate contracts, can earn you a steep discount in the luxury hotel segment. If the hotel knows you already as a customer in good standing, you may also enjoy a steep discount from the published rack rates.
Some travel websites demand a best price guarantee from the hotels listed in their system. A manager who wants to hand-pick his hotel guests has a hard time to allow a booking agency any influence on his pricing policies. My advice: If you need hotel reservations for the luxury segment, use your corporate travel department or a travel agent who has access your corporate rate. If that is not possible, go for the low tech way and give your chosen hotel a call to ask for a room.

Priceline offers currently a 100-Dollar discount when you book a vacation package in Hawaii, Puerto Rico, the Bahamas, & more!

The offer expires on August 14,2010.

But there are a few things you need to know if you want to avoid a car rental disaster. First of all there are some preconditions you need to satisfy, otherwise you will not receive the key for your booked car.

You must have

1. A valid driving license. And possibly an international driving license.
2. There may be a precondition that the driver is older than 21 years.
3. A credit card. Most car rental companies do not accept prepaid credit cards or cards with a printed number. It must be possible to impress the card number on a special paper form. For expensive cars, two cards may be required; one of them should be American Express or Diners in such cases. If a company rents a car for an employee, the credit card can be replaced by a corporate contract combined with a customer card issued by the car rental company. The employee can carry this customer card instead of a credit card, if this is allowed in the corporate contract.

If you ignore one of these requirements, you will just not get your car.

Before you rent a car you should take also a closer look at some conditions of the car rental company.

Important issues may be:

• The opening hours of the car rental outlet, if you need to get your car outside of usual business hours.
• How many kilometers or miles are included in the price, and what is the cost of an extra kilometer?
• Which insurance is included in the price? Are a crash damage waiver and a loss damage waiver included? If not, what is the additional cost?
• Are there any additional fees, like taxes and airport fees or late hour service fees, and how expensive are they?

Limitations of Use
If you plan that more than one person is going to drive the car, there may be a fee for each additional driver. You may also find additional fees for one way rentals. And usually there are restrictions where you can use the car. (E.g. only in the country where you rent your car and not off road)

Foreign Tax Savings
If you rent a car in a foreign county, you may save some tax expenses by using a car rental broker. In this case you will have a contract with the broker. He will issue a voucher for you. You will still need your credit card as guarantee for any damages of the car. The car broker will not pay VAT or local sales taxes if you are not a resident of the country, where you rent the car. In this case the contract with the broker spells out the extra fees for insurance, additional drivers etc. You should carry not only the voucher, but also the paper spelling out these conditions. And you should have an emergency phone number of the car broker to deal with any disputes that may arise with the car rental company.

Avoid Unpleasant Surprises
These are the basic secrets you need to know if you rent a car. They should help to protect you from unpleasant surprises at the counter of a car rental company.

“This problem is not going away any time soon. The current European-wide system to decide on airspace closures is not working. We welcome the operational refinements made by the Volcanic Ash Advisory Centre (VAAC) in their theoretical model but we are still basically relying on one-dimensional information to make decisions on a four-dimensional problem. The result is the unnecessary closure of airspace. Safety is always our number one priority. But we must make decisions based on facts, not on uncorroborated theoretical models,” said Giovanni Bisignani, IATA’s Director General and CEO.

Bisignani noted some successful exceptions which provide examples to follow. “France has been able to safely keep its airspace open by enhancing the VAAC data with operational expertise to more precisely determine safe fly zones. Today, the UK Civil Aviation, working with the UK NATS (the air navigation service provider), announced another step forward by working with airlines and manufacturers to more accurately define tolerance levels while taking into account special operational procedures. Both are examples for other European governments to follow,” said Bisignani.

Bisignani called for (1) more robust data collection and analysis (2) a change in the decision making process and (3) urgency in addressing the issues.

Data Collection and Analysis
“Numbers show that the current system is flawed. Over 200,000 flights have operated in European airspace identified by the VAAC as having the potential presence of ash. Not one aircraft has reported significant ash presence and this is verified by post-flight aircraft and engine inspections. We must back the theory with facts gathered by aircraft to test ash concentration. France and the UK are showing that this is possible. If European civil aviation does not have the resources, it should look to borrow the test aircraft from other countries or military sources,” said Bisignani.

Changing the Decision-making Process
“We have lost confidence in the ability of Europe’s governments to make effective and consistent decisions. Using the same data, different countries have come to different conclusions on opening or closing airspace,” said Bisignani.

“Ultimately the industry needs a decision-making process for ash clouds similar to the one used for all other operational disruptions. Every day airlines make decisions whether to fly or not to fly in various weather conditions. Airlines collate the information available and make informed decisions placing safety first and with full access to all the latest weather reporting. Why should volcanic ash be any different?” said Bisignani.

In the US, which has a lot of experience with volcanic activity, the government identifies a no-fly zone where ash concentration is the highest. For all other areas, it is the responsibility of the airline to decide to fly or not based on the various data sources available. “The US has well-established, safe and effective procedures for tracking the hazards of volcanic ash. In recent years, the industry had no recorded safety incidents from volcanic activity in US airspace. Europe has a lot to learn,” said Bisignani.

Urgency
“Volcanic ash is a new challenge for European aviation. We can understand that systems need to be developed to cope. But what is absolutely inexcusable is the failure of Europe’s governments to act urgently and collectively to provide real leadership in a crisis. We have vast amounts of data from over 200,000 safe flights ready for analysis to support an urgent review of the current processes. The UK is finally moving in the right direction. But what about the other affected European governments? The next transport ministers meeting is scheduled for June 24. What kind of leadership waits more than a month to make crisis decisions? European businesses are dependant on air travel and passengers certainly cannot wait that long for initiatives like the UK’s to be implemented continent-wide,” said Bisignani.

To enhance the industry’s long-term ability to address volcanic ash issues, Bisignani is traveling to Montreal for urgent meetings with the International Civil Aviation Organization (ICAO). “IATA and ICAO have been working intensely on this issue since the crisis first struck in April. IATA is strongly supporting the ICAO task force which is reviewing ash tolerance thresholds with operators and manufacturers. The responsibility of manufacturers is critical in providing performance information to back decisions,” said Bisignani.

Tomorrow Bisignani will meet Roberto Kobeh-Gonzales, President of the ICAO Council and Raymond Benjamin, ICAO Secretary-General. “It is important that we act urgently and globally to better deal with this crisis and to lay a solid foundation for better decision making in future eruptions. Even as Europe stumbles with its fragmented approach, IATA is working with the global community through ICAO and by tapping into the experience of leading regulators like the US FAA to facilitate harmonized solutions,” said Bisignani.

Change Penalty only After Ticketing
If the change occurs before a ticket is issued, the airline will not charge a penalty, although the travel agent working for you may ask for a service fee. If the change occurs after a ticket is issued, a change penalty as specified in the fare rules of the original ticket applies, if you are responsible for the change. If the airline is responsible for the need to rebook a flight, obviously no change penalty will apply.

Different Rules for Different Changes
There are different types of changes of a flight reservation and ticket. Important is the time of the change. There may be a change

• before departure
• after departure
• after no show

The scope of the change is also important. There may be a change of the

• flight date
• flight route

Change Before Departure
If you change your flight before the departure date, a new ticket will be issued according to prices and rules in place at the day of the change. All conditions for the new fares must be met, including advance purchase requirements, ticketing time limits etc. You will pay the price difference between the old fare and the new fare plus the change penalty specified in the old fare. If there are restrictions in the old fare rules regarding a refund in case of cancel, the nonrefundable amount of the original fare remains nonrefundable. The last flight of the new ticket must be completed within the maximum stay specified in the rules of the original ticket.
The change before departure is pretty complicated. For this reason carry many special airfares a rule saying “change before departure not allowed.” In this case the original ticket must be canceled completely, the fare minus the cancel penalty will be refunded and a new ticket will be purchased.

Change After Departure
If you rebook a flight after using a part of the ticket, the fare rules in place when the original ticket was issued will be used. If you do not change the routing and find space allowed with the original fare for your new flight, you pay only the change penalty and a possible service fee charged by the travel agency or airline help desk for their work with handling the change. If you need to use a more expensive fare for the return flight, or if you want to change the route of the return flight, and the new combination is allowed according to the original fare rules, you will pay the price difference between the original return flight and the new return flight plus the change fee. The fare for the already used part of the ticket will not be changed.

Change After No Show
If you did not show up for a flight on time, or if you could not use the flight because of reasons within your own responsibility, and you did not cancel the reservation before the plane started, a no show happened. Many airlines refuse to honor or refund a ticket after a no show. So, if you are stuck in a traffic jam on your way to the airport and you see that you cannot reach the plane, it is important to call the airline and/or your travel agent at least to cancel the reservation to avoid a no show.

Change Procedure
If there is a need to change a flight, two steps need to be done:

1. the reservation needs to be changed
2. the ticket needs to be changed

Sometimes you will not realize that two steps are done, because the travel agent or customer support representative reissues the ticket immediately after the change of the reservation. Many airlines demand in the fare rules that the ticket must be changed immediately after the flight is rebooked.
If you rebook a flight directly through the airline website, the ticket will be changed automatically.

Delayed Change of Ticket
Some airlines allow to change a reservation without immediately changing the ticket. This can be useful if you know that you cannot use the return flight as booked, but you are not yet sure which flight you will be able to use. Your travel agent could enter a return flight and wait with the change of the ticket until you are sure. But, again, this is not possible with all airlines and all airfares, and there may be a short time limit for adapting the ticket to the new schedule after you rebook a flight.

Insiders Remain Silent
Few airlines allow it, and less travel agencies and online booking portals talk about the opportunity. Everyone is looking for a sale, and a reservation is not yet a sale. But the travel agent has to take care for every reservation in his portfolio, whether he has issued a ticket or not yet. Early flight reservations mean work for the travel, with the hope for a payment, but no guarantee for it.

Better Access to Early Bird Airfares
But for you as customer, an early flight reservation means the chance to get the early birds fare, without an immediate firm commitment. This is important if you want to travel at peak days, around Christmas, Easter Holidays, summer vacations, or as far as Asia is concerned, the Chinese New Year season, or if you want to attend a big trade show like the Frankfurt Book Fare.

For Airlines it’s Yield Management
You may ask why the airlines allow these early flight reservations for often less than half the price you pay if you book your Christmas flight a few days before travel time. Do they have money to give away?
No. Airlines sell only a very limited number of seats for these low prices. And the cheap seats for the best timed flights are gone within a few hours after being available in the reservation systems. This helps the airlines to determine very early the really hot selling flights, and raise the prices for these specific connections early on. The aim of any airline is to receive as much revenue as possible for each movement of each plane. The industry term for that goal is yield management.

Only a few Airlines
I have to admit that not all airlines allow early flight reservations combined with late ticketing. An airline which is very closely connected to its home market will know the sensible flight dates without testing the water every year again. But airlines with a relatively small domestic market and a huge global network, like Emirates or Air France/KLM do offer such opportunities.
Price Not Guaranteed before Ticketing
I have to add one word of caution: The ticket price is only guaranteed, when a ticket is issued. Before the ticket is issued, the airline may change the schedule, add a so called fuel surcharge to the ticket price, or withdraw the fare in total. If that happens, you are back on square one, and you have to pay the price as offered on the day you buy the ticket. In most cases, airlines give an advance warning before they withdraw a fare. But at times there is no prior warning.

Relationship with Travel Agent
For this reason the best way for you to save on peak season flights is to try to use early flight reservations and back them up with a ticket order as soon as you are reasonably sure that you will travel. This requires a trustful relationship between you and your travel agent. He does not want to work for free, and he will not do that many times. But he will be happy to provide this service for you if he knows you as a good customer, booking tickets through him on a regular basis. It also is important and a sign of fairness to cancel any reservation as soon as you know that you will not use it.