Travel buyers remain unconvinced about the value of commerical deals with airline alliances.
At a panel discussion at the NBTA Europe conference in Lisbon, buyers said there were both pros and cons to working with alliances, but that overall the benefits suited the traveller as opposed to the company.
In a session entitled Airline consolidation - a threat or an opportunity, a travel manager from pharmaceutical company AstraZeneca said creating an airline deal nowadays was more challenging than ever because it was based on very little logic.
Mia Andersson said: "We need to look at why we are travelling and when we are travelling. If we understand this we could have better discussions with the alliances."
Andersson said corporates were missing out on savings where consolodation had decreassed the number of carriers and services on specific routes.
She said the average ticket price on one US domestic route tripled in price overnight after two carriers dropped to one and said her company had to threaten to move its business to another route in order to get a better deal.
Sally DeFina, an airline-pricing expert with American Express Business Travel, agreed there were advantage and disadvantages to having an alliance deal. She said her company's corporate clients took a mixed view: "Some are embracing deals with joint ventures and alliances and some are shunning it.
"The main disadvantage comes when alliances remove capacity on routes from six to four services giving travellers less choice."
DeFina said there were administrative advantages, such as only having one point of contact and said, at times, it was possible for corporates to get better discount levels and benefited from the bigger networks offered by alliances.
However, she said coordination of corporate deals was often not as good as was claimed.
She said it was possible airfares would be pushed up and discounts would drop in monopolised markets.
DeFina said her TMC had one global client that spent more than $200 million and had a presence in more than 120 countries. She said the company had a Star Alliance deal with 16 of its carriers giving it reach into 37 countries in addition to a Skyteam deal with 12 of its carriers.
DeFina said the priority for this particular client was to have the biggest consolidated global reach.
However, she balanced that against a financial services company with a similar spend and global presence. She said it had individual contracts with 12 Star carriers and nine Skyteam carriers because it believed competition would secure them the best rate.
"Overall I think there are more pros for travellers than there are for buyers," she said, citing frequent flyer points as one of the main draws for business travellers.
Peter Glade, director of sales and market development for Star Alliance, unsurprisingly spoke about the benefits of working with alliances, though he too admitted that the model was not flawless.
"Three out of five airline tickets are spent on alliance carriers," he said.
"People said the alliance was just a fad and not here to stay. But you now have some carriers who were previously fiercely opposed to the idea wanting to create a forth alliance. Air Berlin, for example, has said alliance is vital for profitability.
"However, the regulatory situation prevents us from fully harmonising fares - that would be price fixing. Joint ventures and consolidation make this simpler."
Bob Schumacher, a UK-based senior director for Continental Airlines, said airline commercial deals obtained by clients were not sustainable for carriers and would have to change going forward.
Schumacher, whose airline is in the process of merging with United Airlines, said joint venture was "just a fudge" and that alliances were just a "half-way house".
He accepted there was a need for both JVs and alliances at the moment, but said government foreign ownership laws were preventing the airline business from succeeding properly.
"Government needs to realise it has no place in our industry," he said.