Watch out for hidden costs in your air program.

by Jeremy Quek , Global Air Practice Line Lead, Global Business Consulting

According to Air Monitor 2023, Global Business Consulting’s (GBC) forecast of price movements on the world’s key business travel routes, air fares are set to continue to increase across the world.

But factors other than the base fare can significantly impact the overall cost of your air program – and these may go unnoticed.

Carrier-imposed fuel surcharges (sometimes referred to as YQ or YR surcharges) have been rising all through 2022.?Since March, the YQ/YR surcharges on a roundtrip business class ticket from New York to London have increased by $500 to $1,700. These surcharges – together with the myriad government, airport, and other miscellaneous surcharges – can add more than $2,000 for a roundtrip business class ticket on the New York – London route.

• Be aware that airlines do not typically report YQ/YR surcharges in the quarterly business review, meaning you can’t easily see all the money you are giving to your carriers. ?When an airline reports on the average segment cost (ASC) or average ticket price (ATP) evolution versus 2019, any increases in YQ/YR are not accounted for; the ‘real’ increase can be significantly higher.
• To get the best outcomes at contract renegotiation time, insist that your airline partners include fuel surcharges as an integral part of your organization’s spend. While carriers tend not to allow YQ/YR surcharges to be discountable (negotiated discounts are not applicable to taxes, fees, and surcharges, including YQ/YR) at a minimum, the airline should recognise the amount spent on YQ/YR as part of your travel spend.

To learn how you can get the best outcomes from your air program in 2023, download Air Monitor 2023: https://www.amexglobalbusinesstravel.com/content/uploads/2022/12/Air-Monitor-2023.pdf