LCCs in North Asia eye corporate travel in the world’s largest market

Cyril Tetaz

Executive Vice President, Airlines, Asia Pacific, Amadeus

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Global business travel spend is forecasted to reach a record $1.6 trillion by 2020*.

LCCs in North Asia eye corporate travel in the world’s largest market

Asia represents the world’s largest market for business travel, accounting for about 38% of annual business travel spend**. China has now surpassed the US as the largest business travel market in the world*, and Japan and South Korea rank in the top 10.

It’s no wonder then, that low cost carriers (LCCs) in North Asia have their eye on business travel for future growth opportunities.

Examining how LCCs in North Asia can harness this opportunity and tap in to the rapidly growing corporate travel market was the topic of my panel discussion with AirAsia’s CEO, Benyamin Ismail, and Hong Kong Express’ Director of Strategy and Regulatory Affairs, Philip Herbert, at the CAPA LCCs in North Asiasummit in Osaka earlier this week.

Corporations increasingly want LCCs to be a part of their travel policy to help drive down costs. But they also need the convenience, flexibility and easy trip management that do not conform to the one-size-fits all approach of traditional LCC offers.

Business travellers need to comply with travel and expense policies, have more choice with easily comparable offers, manage complex itineraries, changes, disruptions, cancellations… they need duty of care and on-the-go mobile bookings. Travel agents are best equipped to handle these costly and time consuming processes in an efficient way.

The key to success is catering to the needs of business travellers:

  • Understand if the routes you operate are a good fit for business travel. Convenience is key and airport location as well as frequency play a big part in the business travellers’ choice.
  • Tailor offers to business travellers. Create a range of targeted, bundled fares to include trip extras. Hong Kong Express went down this path with the recently launched u-Biz fare class that includes flight changes, priority check-in, seat selection, baggage allowance and even lounge access. AirAsia X also offers flat beds on select routes. 50% of Navitaire clients do some form of bundling today, and top European LCCs in Amadeus even offer bundles that are exclusive to agents, such as easyJet’s Inclusive Fare.
  • Adopt a multi-channel strategy where travel agents feature prominently to capture all segments and sales opportunities.
  • Offer all competitive fares so the best flight recommendations are available. LCCs providing their full range of products get up to 2x as many bookings from agents.
  • Make bookings simple and easy by adhering to agency workflows, whether you’re a ticketless or ticketing carrier.
  • Work in partnership with agents, who act as an extension of an airline’s sales force, helping build brand and an improved customer experience through all stages of the traveller journey. Engaging selectively with corporations is also a good way to better understand business travellers’ expectations and promote the airline offering.

For more information, check out this infographicand the Top 5 best practices for LCCs to be successful with travel agentsstudy, which looks at some of these practices in more detail.

* Global Business Travel Association (GBTA) press release, July 2016
** GBTA BTI outlook – Annual global report & forecast: Prospects for global business travel, 2014-2018, Global Business Travel Association (GBTA), July 2014