Manufacturing News

Manufacturing value with smarter air travel

For many manufacturers interstate and international travel is an essential business enabler. But with more companies focused on reducing operating costs, manufacturing firms are increasingly turning to travel management companies to ensure long-term cost containment on travel.

Corporate Traveller area leader Matthew Campbell said Corporate Traveller had noticed a rise in manufacturing firms in the small-to-mid market engaging the services of a travel management company to reduce the cost of travel.

“The manufacturing sector more so than any other industry, has been very focused on strategies to reduce costs and increase the value of their spend on travel,” Matthew said. “During the past few years we’ve seen quite a few trends in travel management for this sector with companies looking to improve the way they buy and book travel to boost bottom line savings.

“Manufacturers have been interested in everything from travel policy development, airfare strategies, hotel program development, online booking tools and reporting in order to streamline their travel processes.”

Matthew said that high on the agenda for companies in this sector had been cost reduction for air travel.

“The majority of spend for manufacturers with a high volume of staff travel is generally on airfares, so much of the work we have been focused on for this sector has been helping companies to cut the cost of air travel with strategies such as best fare of the day (BFOD) policy. A BFOD policy means that a business will select the cheapest airfare across a spread of airlines or a selection of airlines within their travel policy, rather than having an exclusive procurement deal with one airline.” 

Matthew said manufacturing firms that have incorporated a BFOD rule in their travel policies were realising savings of between 20 to 30 per cent on their annual airfare expenditure.

“By using a BFOD strategy, manufacturers are going to achieve savings because their overall spend is generally less and they’ll also be seeing the cost benefit of increased compliance, which can also lead to greater travel savings,” he said.

“BFOD ensures customers are getting air travel that not only suits their business needs but secures the cheapest possible fare available in an open sky environment – rather than with one select carrier. As well as the cost benefits of using BFOD, manufacturers are benefitting from greater fare flexibility as offered by all carriers operating in the market.”

Manufacturing companies that book airfares through a dedicated travel management company are in the best position to take advantage of BFOD strategy.

“A travel manager like Corporate Traveller can help you build guidelines in your travel policy around BFOD and help to monitor the use of BFOD,” he said. “A travel manager also has the online systems to search, track and select the best fare within minutes, which can save companies a substantial amount of time.”

[Sally Gordon is corporate communications manager, Flight Centre Limited.]


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