On the Road: Airline Fees Trip Up Corporate ... - First Business News

?It mystifies me because every time I check in on the Web, like a day in advance of my flight, there?s something more they?re offering me,? she said. ?Sometimes you need to go through three or four screens with offers: Do you want to double your frequent-flier miles for this trip? Do you want to board early? There are so many choices,? said Ms. Trotochaud, a senior director at Concur.

Of course, the proliferation of offers for services that carriers once provided as part of the base fare is no accident. Airlines around the world pocketed an estimated $21.46 billion in revenue from the fees for those services last year, according to research by Amadeus and IdeaWorks. For many airlines, fees for checked bags ($3.4 billion last year in the United States alone), and various services like front-of-line boarding, up-front aisle seating, and in-flight meals mean the difference between profit and loss.

Airlines have been charging some fees for a long time, but began aggressively expanding them only in 2008, when they started charging for most checked bags.

That?s not going to change. So we might as well stop complaining about the fees.

Corporate travel managers have gotten to that point, and they are now just trying to ?get their arms around them? for better budgeting and planning, said Ms. Trotochaud, who is a member of a working group, called the Airline Ancillary Product Global Task Force, of all the businesses involved in the buying and selling of air travel.

For their part, airlines say they want to provide as much transparency as possible for their fees. But doing so is difficult because there is no standard method of classifying and selling their for-fee services. ?One problem is, we airlines have a lot of products we want to sell you,? Doug Parker, the chief executive of US Airways, told corporate managers last month at the convention of the Global Business Travel Association in Denver.

There has been a lot of confusion about fees in general, incidentally. Some estimates, widely reported, claim that fees represent as much as 20 percent of the cost of a typical business trip. But industry experts I talk to say that fees account for at most 9 percent of corporate air travel spending.

The problem for companies and their traveling employees is that the myriad computer systems for travel booking, credit card reporting and company expense management don?t all speak the same language. And, as Ms. Trotochaud pointed out, a $50 airline fee listed on a business traveler?s corporate credit card report could be for two checked bags or a one-day pass to an airline lounge. The checked bag charges may be allowable under company policy; the lounge pass may not.

?The challenge is to get a better picture of that transaction,? she said. That?s easier said than done, of course, because not only is there no uniform standard for describing and listing fees, there is none for budgeting for them in advance or managing them later when an expense account is filed.

Also, many corporate travel departments still haven?t drafted policies on fees. ?Companies now need to figure out which things are reimbursable, and which are not,? she said. ?Then they need to educate their travelers, so that when those travelers are making decisions along the way they?ll know what?s going to be reimbursed and what?s coming out of their pockets,? she added.

Drafting sensible and clear reimbursement policies is important, Ms. Trotochaud said, pointing to a recent study by the travel research firm PhoCusWright that found that only about a quarter of travel managers had communicated to employees a clear policy about travel expense reimbursement.

Without clear policies, she said, ?the onus is on the traveler? to guess, sometimes when checking in at the airport on the day of travel, whether a fee for a certain service may be disallowed later.

?The reality is that most travelers are not booking far in advance,? she said. ?They might not even know until the day of travel whether they might need to check a bag. And there are those transactions that happen when you?re checking in online or at the airport, or even on board the plane.?

She added, ?I think companies struggle with what fees are reasonable to reimburse. But I also think business travelers are confused about what?s allowed and what isn?t.?

E-mail: jsharkey@nytimes.com

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Source: http://firstbusinessnews.net/on-the-road-airline-fees-trip-up-corporate-travel-managers/

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