Follow our step-by-step guide on how to tender for air

FOLLOWING on from advice on compiling an RFP for a TMC in our last issue, Dennis Bailey explains the subtle differences when it comes to tendering for air. "The objective is fundamentally the same, and the methodologies used to get there are similar," he says. "But with an RFP for an airline, the quality and quantity of data supplied in the RFP is essential, the time demands of the RFP process should be realistic, and the ability – or lack of it – of the buyer to deliver what is promised post-tender in terms of flown revenue/market share on the contract will have a direct impact on any subsequent deals."

STEP 1: Analyse your travel patterns and sourcing objectives, and what you can bring to the partnership you will hopefully form with your chosen supplier(s). Match your consolidated and leveraged needs with the supply base which best fits those needs, and it will result in a mutually beneficial commercial partnership between the buyer and seller.

Detailed data mining of your travel patterns is essential, so too is matching those patterns to the carriers who fly the routes. If your patterns are relatively straightforward, i.e. London to Paris, and you are looking to source this city pair only, you would only analyse the carriers who fly that route and issue the RFP accordingly.

However, if you have a complex matrix of city pairs, served by a mix of carriers across those routes, there may be a number of 'what if' scenarios you may wish to build into your analysis, possibly even an alliance deal. Add a further complexity of bi-lateral requirements on certain routes, and it becomes a lot more complex.

STEP 2: Draft the RFP document and provide as much data to the airlines as possible. As an absolute minimum, include the total spend on a route, total sectors flown, the class of travel flown, the sectors and spend split between First, Business, Premium Economy and Economy and a reference to the travel policy rules, which in turn will indicate your ability to move market share. Lastly, be realistic on timing. Nearly all proposals will have to be processed by an airlines revenue management department, and then signed off at a senior level, so, on behalf of the airlines, give them enough time to prepare a response. I would suggest a minimum of three weeks for the more complex proposals.

STEP 3: The decision process should be relatively simple, involving an evaluation of the commercial offers made. However, don’t forget to factor in the 'added value' aspects of some proposals, such as free chauffeur drive at either end for Business Class travellers.

STEP 4: Sign the contract and get your travel management company to undertake an audit to ensure the fares have been loaded in the GDS as agreed.

STEP 5: Undertake monthly analysis in conjunction with your TMC to monitor deal performance, but also to identify emerging trends in new routes, which could be added to existing agreements after further negotiations with the respective carriers.

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