Businesses are paying the price for hidden airline fees, according to the Business Travel Coalition. Managed travel programs invariably purchase their airline tickets through travel agencies and TMC (travel management companies), both of which airlines utilize but fail to share their additional service fees.
These hidden fees have big implications for corporations that use these travel programs, and five of them in particular significantly increase travel costs.
1. Airline prices and TMC transaction fees. Travelers are unable to accurately compare airline prices because the airlines do not disclose the hidden fees upfront. This results in higher costs passed on to the corporations. TMCs often attempt to find out what the additional fees are in order to inform their customers, but that can result in higher costs for them and additional fees for the corporations.
2. Travel Program Support. Because corporations do not have access to many of the content fees, particularly rebundled packages for business travelers, the travel programs are left looking disingenuous for not being able to effectively deliver advertise prices.
3. Policy Compliance. Often times, corporations cannot track additional fees, meaning they have no way of holding employees accountable for additional spending.
4. Data Reporting. Corporate travel departments will always have incomplete data when there are hidden fees charged by airlines, making it more difficult for them to prove they met contractual obligations.
5. Airline Cost Transfer. Some airlines attempt to require marketplace access to fee information in order to “flip the economic model”. TMCs pay airlines for this content, and corporate travel programs pay TMCs for their cost. “In effect,” BTC explains, “virtually all airlines’ product merchandising and distribution cost could be borne by the customer, with the corporate travel departments having little control over the drivers of these costs.”