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Business Travel Trends and Forecasts Toronto
Westin Copley Place - September 10, 2019
New York Marriott Marquis - September 13, 2019
Delta Air Lines for the third consecutive year maintained
its position as the leading U.S. airline as rated by corporate travel buyers in
the BTN Annual Airline Survey. In
continuing an impressive streak, it topped competitors in nine of 10 categories
and held a significant lead in overall average score. The carrier not only has
won more corporate business—as evidenced by double-digit percentage corporate
revenue growth—but also the adulation from corporate travel buyers.
The competitive set, however, hardly is standing still. As
the established leader in the U.S. corporate market, the target is on Delta's
tail. This year, every ranked airline other than Delta improved its score from
the prior year's survey. Placing second for the second consecutive year,
American has narrowed Delta's lead. United, meanwhile, recovered to place third
following a fifth-place finish last year, while Southwest and US Airways,
respectively, ranked fourth and fifth.
[Please click here to
download a pdf of BTN's 2013 Airline
Survey, featuring all charts and rankings.]
Corporate travel buyers in general are more satisfied with
airlines this year, with overall average ratings in every category rising from
last year. Among 429 corporate travel buyer respondents, 31 percent indicated
that overall airline customer service for their organizations in the past 12
months improved, compared with the 20 percent who reported service
Not only are Delta's survey results once again
industry-leading, but many write-in responses read like love letters. "Delta
exceeds expectations in all areas," wrote one respondent. The airline "goes
above and beyond," gushed another. There are dozens of such comments
collected from respondents, with nary a negative word in the bunch.
One respondent spotlighted an "excellent level of
service and communication." Several singled out their account managers,
including the "amazing" rep who was "available to us whenever we
need," according to one. Buyers also heaped praise on Delta's flexibility
in structuring corporate agreements, the reporting it provides to corporate
accounts and its handling of service disruptions.
Delta's 3.93 overall rating on an ascending scale of one to
five (delivered by 285 qualified respondents from organizations with at least
$500,000 in 2012 U.S.-booked air volume) fell a modest two-hundredths of a
point from last year's finish, when it swept all categories. Delta this year
ceded control of only one, as Southwest led in overall price value.
Regarding product and service attributes that touch business
and leisure travelers alike, Delta this year brought product investments, new
airport facilities and leading operational performance (Delta has led major
U.S. airlines in on-time performance in recent months, according to
The carrier this year also undertook many initiatives
squarely aimed at the corporate market: It expanded corporate reporting to
include international point-of-sale data, made available for sale via
Travelport's systems its Economy Comfort seating product and began piloting a
corporate recognition program that greets client travelers at check-in.
Additional personalization is to come, executives said.
Delta scored particularly well for its network, partnerships
and frequencies and on the value of relationships with account managers. On the
latter, vice president of global sales Bob Somers stressed that "consultative"
relationships fostered with corporate clients have "got to be bigger than
To that end, Delta has "invested in the resources and
the tools" to make relationships better, said Somers. That includes
technology, round-the-clock sales support and customer relationship management
"Our goal, as we've committed to our customers, is to
be easy to do business with," said Somers. "In a complex world, that's
sometimes difficult, so we're constantly listening to our customers and
constantly evaluating how we do business."
Senior vice president of global sales Steve Sear has used
the phrase "continuous improvement" in discussing goals for the
It seems to have resonated.
"When it comes to their reporting, their services,
everything they're doing, they just keep going leaps and bounds ahead of the
other carriers," said Sapient global travel and client experience lead
Michelle De Costa.
But where Delta goes, the competition tends to follow. The
airline in 2008 went first in the ongoing wave of mega-mergers, combining with
Northwest to gain the scale and network that United-Continental and now
American-US Airways strive to match. Competitors also have mimicked Delta's
pioneering corporate reporting, and the airline is at the forefront of
developing personalized client recognition programs and advancing CRM sales
American this year continued to restructure under Chapter 11
bankruptcy protection and, after an unexpected but now resolved antitrust suit
filed by the U.S. Department of Justice, is preparing to merge with US Airways.
AA appears to have overcome those distractions as it improved its score from
last year in every BTN survey
category. The carrier maintained a second-place ranking among the largest
domestic airlines and narrowed the gap to market leader Delta.
Vice president of sales Derek DeCross sees "a lot of great
momentum" for the airline. Merger aside, AA during its turn in Chapter 11
has refreshed its fleet—an "average of one new plane per week,"
DeCross said—upgraded inflight products (including Wi-Fi and new premium
seating) and improved terminal facilities (at the Dallas/Fort Worth hub, for
example, with changes to others coming).
Regarding the corporate market, AA in the past year
restructured its sales force, enhanced customer relationship management tools
and began providing new client reports. Like Delta's, they highlight
client-specific metrics on baggage handling, on-time performance, purchasing
behaviors, traveler status profiles and ancillary purchases and/or waivers.
"We've been improving that report as often as we can,
as we get new data streams," said DeCross. "It's great because it
helps the corporate travel manager talk about the value that they're providing,
and it helps us talk about the value we're providing to the corporation as
Regarding the sales force restructuring, DeCross said it was
"first implemented toward the end of last year, and we're just hitting our
stride." The move included shifting sales personnel from headquarters "and
placing them closer to our customers" and establishing "a service
team" to support account reps as they service agencies and buyers. "Within
these teams, we have representatives based in Los Angeles and New York City
that are dedicated to meeting the unique needs of the banking and entertainment
industries," said DeCross.
Citing enhancements to customer relationship management
tools, DeCross expects to further segment clients to better tailor fares and
"There are many different factors that go into
segmenting customers and figuring out not only what is the right discount, but
also what markets they most value, what type of products they most value, and
whether there is any creativity we can employ to come up with something that's
a bundle of goods that better services them versus some of our competitors,"
Meanwhile, amid all the uncertainty about its merger and
ongoing bankruptcy restructuring, DeCross said client communication during the
past year was key. To that end, AA formed "a team around B-to-B
communications," a new initiative still being developed, he explained.
Following a recent meeting AA held with agency partners,
Executive Travel CEO Steve Glenn said he was optimistic.
"I really think the future is bright for AA, as what
they shared with me indicates their whole focus in the future is on their
customer and how they are committed to make the travel experience easier and
much more personalized," Glenn said.
Buyer respondents to BTN's
survey generally had kind words for AA. "I have found American Airlines'
quality of service to be among the best domestically that I have experienced,"
according to one. "We have great account support from American Airlines,"
Meanwhile, at least one buyer sounded encouraged as the
airline begins merging with US Airways, writing, "Assuming some of AA's
business practices are adopted, it will improve the overall relationship."
A turbulent merger integration with Continental Airlines
contributed to United's last-place finish in BTN's 2012 survey, but the carrier this year climbed to number
three and earned an improved score in every category.
"We certainly were disappointed with the results in
2012," said United senior vice president of sales Dave Hilfman. "We
knew we had a lot of things to improve upon—and we have."
United last year was hit hard by a troubled transition to a
single passenger services system, followed by a period of declining operational
performance. The airline's top brass last year acknowledged that business
travelers were taking a "detour" to competitors, and last year's
survey showed deteriorated corporate buyer sentiments.
If 2012 brought strife, this year has brought
stabilization—starting with systems and operations, and extending to the sales
"If you look across any of the statistics, certainly on
the operational side, whether it's on-time performance, baggage handling,
reduced customer complaints and what we'd say is a dramatically improved
product, we feel like we made enormous headway," said Hilfman.
Beyond the carrier's core operations and product, he called
out several initiatives meant to improve United's standing in the corporate
The airline this year pioneered a new simplified contracting
format that has garnered positive responses. "We're always asked, 'How can
[United] provide more responsive, simpler contracts?' " Hilfman conveyed. "We've
taken that to heart and have done a lot to simplify our contracts."
The result is United's Master Corporate Travel Agreement,
which gives clients the option to maintain terms, conditions and boilerplate
legalese from one agreement to the next, and focus on commercial terms at
regular intervals. It has been welcomed by some corporate travel buyers, even
if there are some skeptical procurement hardliners.
Christopherson Business Travel's Sam Bond in a blog post spotlighted
the initiative. "During a recent meeting with United Airlines and one of
our corporate customers, I was pleasantly surprised with the options presented
for their contract renewal," he wrote.
Beyond simpler formats, Hilfman has placed an emphasis on
contract flexibility by "giving our sales managers and corporate teams
more authority to make adjustments."
United received good marks for quality of communications,
another focus for the sales organization.
"Both Delta and United have made some efforts to
communicate their programs more clearly," wrote one buyer respondent. "In
general, I don't receive a lot of customer service from any of the carriers."
This year, Hilfman said United relaunched a quarterly client
newsletter and has continued to hold frequent advisory board meetings with
corporate clients and travel management companies. "We've done far better
in providing advance notification to our key accounts, in terms of policy
changes or product or schedule updates," he said. "People never want
to be surprised."
Meanwhile, regarding enhanced corporate reporting, "there
was a slight lapse in 2012, when we were switching over our IT systems,"
said Hilfman. But, United late last year again began providing "enhanced
customized corporate reporting," showing on a per-client basis "the
value of a corporation's interactions with United." That includes the "baseline
economics relative to discount agreements," as well as "all the
components that make up a corporate agreement," including the value of
bag-fee waivers for status holders, upgrades and client-specific operational
Remarks shared by travel buyer respondents were a mix of
good and bad, indicative of United's middle-of-the-pack position in the survey.
One respondent opined that "United still hasn't figured it all out with
Continental." Another said that "United is showing signs of
improvement, but cannot seem to get over the hump and turn the corner."
Hilfman said his ears are open to the good and the bad, with
the goal of constantly improving the airline's standing. "Something we've
always aspired to is being an airline that's easy to do business with," he
Value Best At
Even though Southwest Airlines' overall score rose to 3.25
from 3.08 last year, the carrier slipped a spot in the rankings. Southwest,
however, maintained an industry-best rating in the overall price value
category—the carrier in 2012 tied Delta in the category—and picked up good
marks for quality of customer service, traditional strong suits for the carrier
in BTN's survey.
CFO Tammy Romo during Southwest's most recent quarterly
financial results call said that corporate sales increased "rather
dramatically" year over year, and Southwest director of corporate sales
and distribution Rob Brown pointed to such growth contributors as new markets
the carrier is serving, greater spending from existing customers and new
Though airfare auditing firm Topaz this year published a
report suggesting that "competing airlines were lower than Southwest
Airlines over 60 percent of the time" in 100 domestic city pairs, buyers
continue to see tremendous value in the airline. "We're very competitive
with our everyday low-fare strategy, and we become even more competitive with
the discounting that we do," said Brown. "But when you consider the
total cost of travel, take into account change fees in particular, that's
something business travelers do on a frequent basis." Southwest stands out
for not charging change fees and remains the only major U.S. airline allowing
two free checked bags.
Among enhancements for corporate travel buyers, Southwest in
the past year expanded what Brown called a "preferred customer service
help desk," which provides assistance to most customers with contracts.
Southwest's score in flexibility in negotiating transient pricing this year
rose to 3.12 from 2.72 last year, with buyers rating the carrier as more
flexible than United and US Airways.
"Southwest has been extremely flexible in pricing and
contract terms while we work to get our program in order," according to
one respondent. Another wrote that "Southwest has increased its
flexibility," with yet another pointing to securing "an upfront
discount" with the carrier.
The airline's score in the distribution channels category
rose to 3.05 this year from 2.75 last year. Brown said Southwest's corporate
booking portal Swabiz "continues to be an integral part of what we're
doing," as some "major customers book through Swabiz and only through
Though the its global distribution system presence doesn't
match that of its largest competitors, Southwest has made a concerted effort to
expand booking channels. Brown noted that Orbitz For Business and nuTravel this
year joined Concur, Egencia, Sabre's GetThere and Rearden Commerce's Deem as
systems offering Southwest's content.
Deals with corporate booking tools "have enabled us to
work with customers that we've not been able to work with before," Brown
explained. "It's opened up new doors to us and created some new
partnerships with key corporate customers."
US Airways Up But
US Airways this year fell one spot from last year's
fourth-place ranking, but not for lack of improvement: The airline this year
lifted its overall score to 3.19 from 3.07 last year and posted better ratings
in nine of 10 categories.
The carrier for years has found itself on a different
competitive footing than its larger network competitors: its hubs are in
smaller business markets, its position in the managed travel market is less
entrenched, its network is not as expansive and its sales force is more
Though its merger with AA will help address those hindrances
in the corporate market, the airline has had some success in recent years as a
After downplaying the corporate market in the mid-2000s, the
airline in recent years has rebuilt and reinforced sales efforts in the United
States and abroad. For the most recently
completed quarter, C-level executives touted strong year-over-year corporate revenue growth, particularly in
US Airways' corporate business has "continued to pick
up," said managing director of passenger sales Michael Schmeltzer. "We've
been in the high single digits in terms of corporate growth [this year], and in
the third quarter we've gone up into the double digits. We're seeing it
continue to build."
Following a ramp-up in recent years in sales personnel,
additions to sales staff have "leveled off," but the carrier is "continuing
to build and continuing to win accounts" even if that's "at a more
moderate pace" than in previous years when it was just re-engaging
Schmeltzer said the airline's focus this year has been to be
more creative, flexible and responsive with clients. "Something we've been
talking about more and more—and [CEO] Doug Parker has been saying—is
relationships matter," he said. "We continue to drive that globally
as a sales team."
Alluding to enhancements for corporate reporting during
summer 2012, Schmeltzer said US Airways clients now are receiving metrics on upgrades
that their travelers receive.
As for features for corporate travelers, Schmeltzer said
that Wi-Fi availability on mainline domestic flights this year hit 90 percent,
and he noted US Airways' first mobile app and a bag-tracking feature.
Like with American, this year has not been without
distractions. The merger "has required us to really be on our game with
communications," Schmeltzer said. "Everyone has questions, of course.
Sometimes we can answer them and sometimes we can't, but we've been working
really close with the corporate communications team and the marketing team—we've
dedicated support with marketing—to get as much information out to our clients
Overall responses from clients were mixed, with one citing "awesome
feedback and information" from the carrier during a roundtable this year
for corporate clients. Another called US Airways "our primary carrier,"
explaining that the company's account representative was "amazing in
communication—especially during this merger time period." Another gave a
shout-out to US Airways corporate reports.
That was the good, but one respondent voiced the bad and
ugly, claiming the carrier is "the most difficult airline to work with in
Meanwhile, for networks, airline partnerships and
frequencies, US Airways ranked above only Southwest, a primarily domestic
operator with no meaningful alliances.
Indeed, the US Airways merger with American is predicated
partly on giving those carriers the scale and network to match Delta and
"Our network is what it is—we don't have a global
network like Delta or United," according to Schmeltzer. "We know
that; the clients know that, but we want to make sure they know what network we
do have." While the carrier traditionally has been "thought of as a domestic player," he said,
growth has continued in Brazil and Mexico—as well as Europe, where "we
cover more than people realize, particularly out of Philly but also out of
Charlotte." So have sales efforts for those markets. "International
points have been growing faster than overall corporate," said Schmeltzer. "That's
because we've been globalizing our relationships."
The 16th annual Business
Travel News Airline Survey uniquely measures corporate travel buyer
perceptions of airline performance in negotiating and maintaining preferred
programs, delivering service and providing value. Survey categories were
developed through a series of exchanges with travel buyers, corporate travel
agency managers and airline sales executives to reflect the way in which
corporate air travel buyers perceive each airline. Asked to grade only those
airlines with which they "either negotiated a contract or booked a
meaningful amount of business" in the past year, respondents ranked
domestic U.S. carriers in 10 categories on a scale of one (poor) to five
(excellent). BTN averaged scores in
each category to create an overall score for each carrier. All categories were
Not every respondent rated every airline in every category.
Those participants who offered no response for a particular category or airline
were not included in that average rating.
BTN from mid-July
to early September collected responses from travel manager and buyer members of
the BTN Research Council and a randomly
selected subset of qualified subscribers of The BTN Group's Business Travel News and Travel Procurement publications. A total
of 491 qualified respondents completed the online questionnaire, 285 of whom
represented organizations that in 2012 spent at least $500,000 on airline
In an effort to restrict the survey to perceptions of those
involved in managed travel programs, respondents whose organizations spent less
than $500,000 in 2012 U.S.-booked air volume were excluded.
Of the 285 respondents in the final sample, 19 percent
represented organizations with U.S.-booked air volumes between $500,000 and
$1.9 million; 43 percent represented those spending between $2 million and
$11.9 million; and the remaining 38 percent represented those spending more
than $12 million.
The survey listed the largest domestic airlines as
identified by the U.S. Department of Transportation, excluding regional
affiliates of major carriers. Alaska Airlines, Frontier Airlines, JetBlue
Airways and Virgin America elicited responses from less than 40 percent of the
final survey sample and therefore were excluded from this report.
Equation Research hosted the survey and tabulated results.
negotiating transient pricing: The airline's demonstrated ability to
customize business travel program discounts and other negotiated pricing
negotiating meetings pricing: The airline's demonstrated ability to
customize meetings travel discounts and other associated negotiated pricing
negotiating services and amenities: The airline's demonstrated ability to
negotiate additional offerings for individual business travelers, including
soft-dollar benefits and special treatment in-flight and at the airport
The airline's demonstrated ability to provide comprehensive published and
private airfare content through preferred booking methods
resolution: The airline's demonstrated ability to respond quickly and
effectively to business travel buyer and corporate traveler concerns
Quality of client
communications: Demonstrated performance in informing business travel
buyers about changes in airline management, products, programs, sales and
Value of relationships
with account managers and sales reps: Demonstrated performance in the
productivity and frequency of meetings with local, regional, national and other
airline representatives as well as representatives' power to negotiate
agreements, offer options and make decisions regarding price and service
Quality of customer
service: Overall perception of airline based on timeliness, reliability and
cleanliness of service, support from airline personnel and communication to
and frequencies: The airline's ability to provide the necessary service to
the destinations organizations require
Overall price value:
The perceived worth of an airline's service levels relative to fares, fees and
originally appeared in the Nov. 25, 2013, edition of Business Travel News.