CASE STUDY: Cost Savings
CTM delivers 25% cost savings despite increased travel activity.
CTM worked with it’s mining client to deliver a refined travel policy which would achieve cost savings without diminishing the travel experience.
Read on to find out how.
The client is a large Australian mining company with operations in the Bowen Basin.
As part of the company’s mining operations, employees regularly traveled between Brisbane and Emerald on commercial airlines. CTM implemented a new initiative to reduce the unnecessary use of flexible airfares, thereby reducing the client’s total spend on this frequently traveled route.
CTM was tasked with reducing the client’s corporate travel costs without impacting the reliability or comfort of the travel experience.
Specifically, CTM’s objectives were to:
• Reduce the number of flexible fares booked by travel arrangers.
• Reduce the travel costs of employees flying between Brisbane and Emerald.
CTM needed to overcome several challenges to successfully reach the client’s objectives without inciting a negative response from travelers or travel arrangers.
• Procedures: Travelers communicated directly with travel arrangers about ticket preferences, which allowed them to decide the type of fare that they wanted to book.
• Company culture: Travel arrangers followed the instructions of travelers when they requested flexible fares, without encouraging them to book cheaper fixed fares.
• Attitudes: Travelers preferred flexible fares over fixed fares due to the increased flexibility these presented, despite the extra costs incurred.
To address these challenges, CTM focused on engaging travel arrangers and shifting employee attitudes. Through a quarterly reporting framework, CTM discovered a high number of travelers were booking flexible fares but were not regularly changing their flights. CTM identified this as a primary opportunity for cost-reduction, as these fares were high-cost but low-value for the client.
Through this discovery, CTM engaged directly with the travel arrangers and highlighted the cost versus value issue of booking flexible fares. Instead of following the directions of individual travelers, travel arrangers were asked to discourage travelers from booking flexible fares and consider fixed fares.
Travel costs reduced by 25%
Prior to CTM’s program review, the client had a 60 per cent uptake of flexible fares across approximately 1,200 sectors. Through our initiative to reduce the use of flexible fares, the total travel spend was reduced by 25 per cent with a marked decline in the use of flexible fares (down 26 per cent).
This cost reduction was possible despite the addition of 100 extra sectors flown and a consistent number of booking changes over the same reported period, proving that flexible fares did not deliver best value for the client.
CTM’s extensive experience in the travel industry allowed the client to achieve additional savings and an enhanced return on investment. Through this partnership, CTM successfully changed the company’s travel culture and significantly improved the client’s bottom line without sacrificing the travel experience of its employees.
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