Window or aisle? Would you prefer quicker access to the bathroom and your baggage or to not be disturbed and have a better view? And more importantly, should the company or the employee pay for the choice?
This question is becoming more of an issue for travel managers as both full-service and budget carriers bet on unbundling ancillaries as a strategy to maximize revenues. And currently, there’s not a consensus.
A CWT survey of travel managers from close to 50 companies in key Asia Pacific markets has found that they’re divided over whether or not to reimburse business travelers for seat selection, but they’re likely to pay for in-flight meals.
In every country, except for Japan (where travel managers are evenly split), a majority won’t pay for seat selection. In most markets it’s a fairly slim majority, but in China roughly two-thirds of companies won’t pay.
For meals, travel managers tend to be a little more generous, with a clear majority (in excess of 70%) agreeing to pay in all major markets, save one. China again is the outlier, with only 51% of travel managers paying for meals.
These numbers are clearly influenced by the travel market in question. In China, where a large proportion of trips are domestic, airlines typically don’t offer or charge for seat selection on domestic flights.
CWT’s Senior Director of Asia Pacific Multinational Sales Akshay Kapoor also suspects there’s a strong correlation between companies who pay for meals and seat selection, and those who use low-cost carriers in their travel program.
“When the organization decides to introduce low-cost airlines into their network or in their policies, they automatically start to open up to some of these obvious challenges that come along with it. Because low-cost airlines present an opportunity and a challenge,” he said.
Low-cost and full-service carriers converge
Unbundling is here to stay, and it’s likely to become a bigger issue for corporate travel programs.
Some of it is unavoidable. Even among full-service airlines, the overwhelming majority – including Singapore Airlines, Qantas, Air India, and Air China – now charge for advance seat selection on some of their lowest economy class fares. Baggage isn’t always included either. In fact, a report by CAPA – Centre for Aviation found that most full-service carriers (including British Airways, Finnair, Aer Lingus, Virgin Atlantic, Delta, Air France, KLM, Alitalia and Lufthansa) offer transatlantic tickets without a checked baggage allowance. Most recently, Emirates became perhaps the first in the industry to make a serious attempt at unbundling business class, introducing “Special” fares which cut certain features like lounge access and their chauffeur service.
And the landscape is becoming more complicated as low-cost and full-service carriers compete for the middle ground. Full-service carriers, who don’t want to cede their customer base to low-cost competitors, are increasingly offering unbundled discount fares.
At the same time, low-cost carriers have started to offer re-bundled tickets, where the customers pay a little extra for a package that might include an extra baggage allowance, a meal and seat selection.
What makes things trickier is that depending on the airline, the route and the point of sale, sometimes ancillaries may not be distributed through the global distribution systems (GDSs) and need to be booked directly through airlines’ websites. This makes it harder for travelers to compare like-for-like fares. That said, conversations are taking place between various parties across the travel industry to make these products and services available in the GDSs.
Navigating the new, unbundled reality
On the one hand, unbundling has resulted in increasing consumer resentment as services that were once included now cost extra. But it also means cheaper tickets. For travel managers, it means balancing costs against the need for a pleasant and productive trip.
Organizations need to establish clear guidelines about what their business travelers can reasonably accept and what the company will pay for. In most cases, the company should cover anything that would have been previously included in a bundled fare, such as baggage, seat selection and meals.
“I would advise travel managers to default to reimbursing for these things,” said Mike Valkevich, CWT’s Vice President of Global Sales and Program Management, Asia Pacific. “More often than not, it’s worth paying a little extra to ensure an employee travels comfortably and arrives at their destination in the right frame of mind.”
Of course, the company should set sensible limits. It might offer to pay for seat selection, but refuse to pay for a more expensive seat in an exit row. And paying for baggage doesn’t mean rubber stamping all requests.
“In the rare case where an employee incurs an excess baggage fee for bringing a pair of skis along to a business meeting in Hokkaido, it might warrant a deeper conversation with the line manager,” said Mr. Valkevich.
Companies should also carefully consider if they really gain anything from refusing to pay for meals or seat selection. It saves no money, for example, to refuse to pay for an in-flight meal if your employee has a meal allowance of $45 he or she can spend at the airport.
Once these policies are established, the company might try to negotiate a deal with the airline so that the ancillaries will be included. Success, of course, will depend on the airline and the market. In India, for example, it’s fairly standard for corporate deals to include seat selection and meals. In other markets, it might be trickier because budget airlines are much more focused on leisure travelers.
Finally, companies should be open to collecting data so that they can see whether or not their policies are effective.
Ultimately, Mr. Kapoor thinks it’s about striking a balance between cost and comfort.
“What does a good experience for my business traveler look like? Cost savings and experience need to be taken into account and we need to create a balance,” he said.
A quick glance at airlines' seat selection policies, and charges for selecting standard seats (i.e. seats that are not including priority / front row / emergency exit / extra legroom seats)
Air China
Advance seat selection available free of charge on routes within Asia. Advance seat selection chargeable (RMB50-100) for seats towards the front of the economy cabin on routes to the Americas, Europe, Africa and Oceania.
Any available Economy seat can be reserved for free once online check-in opens.
Air India
Advance seat selection chargeable for seats towards the front of the Economy cabin. Seats towards the rear of the Economy cabin can be reserved free of charge.
Any available Economy seat can be reserved for free once online check-in opens.
All Nippon Airways (ANA)
Advance seat selection chargeable for passengers booked on certain fare classes (V, W, S, L and K) to reserve aisle and window seats towards the front of the Economy cabins. ANA Diamond Service and Platinum Service members are exempt.
Aisle and window seats towards the back of the cabin can still be reserved for free.
Any available Economy seat can be reserved for free once online check-in opens.
British Airways
Advance seat selection chargeable for Economy (from GBP7), Premium Economy (from GBP18) and Business (from GBP20). Members of the Executive Club and other oneworld frequent flyer programs can reserve seats free of charge at different stages.
Any available Economy seat can be reserved for free once online check-in opens, except for travelers on a “Basic” ticket.
Cathay Pacific Airways / Cathay Dragon
Advance seat selection chargeable (HKD60-330) for Economy passengers booked on certain fare classes (S, N, Q and O). Marco Silver members or above, and oneworld Ruby members or above, are exempt.
Any available Economy seat can be reserved for free once online check-in opens.
China Eastern Airlines / Shanghai Airlines
Advance seat selection available free of charge on international flights. Not available on domestic flights.
China Southern Airlines
Advance seat selection available free of charge on domestic flights.
Advance seat selection chargeable (RMB30-100) for seats towards the front of the economy cabin on routes to the Americas, Europe, Africa and Oceania.
Any available Economy seat can be reserved for free once online check-in opens.
Delta Air Lines
Advance seat selection for preferred seats towards the front of the Economy cabin is chargeable.
Other Economy seats can be reserved in advance for free, except by passengers on a Basic Economy ticket who will have to pay a fee.
Emirates
Advance seat selection chargeable (USD25-80) for passengers booked on “Flex”, “Special” and “Saver” fares to reserve seats towards the front of the Economy cabin. Emirates Skywards Gold members and above are exempt.
Advance seat selection chargeable (USD15-35) for passengers booked on “Special” and “Saver” fares to reserve other Economy seats. Emirates Skywards Silver members and above are exempt.
Any available Economy seat can be reserved for free once online check-in opens.
Etihad Airways
Advance seat selection chargeable (AED100-130) for passengers booked on “Economy Deal”, “Saver” and “Classic” fares.
Any available Economy seat can be reserved for free once online check-in opens.
Hainan Airlines
Advance seat selection chargeable (RMB100-600) for seats towards the front of the economy cabin on international routes. Hainan Silver Frequent Flyers and above can reserve some seats for free on certain routes.
Indigo Air
Advance seat selection is chargeable (INR100-800 on domestic flights; INR 250-1000 on international flights).
Some middle seats can be reserved free of charge.
Japan Airlines
Advance seat selection available free of charge, except for passengers booked on the “O” fare class in Economy.
Jetstar Airways
Advance seat selection is chargeable for “Starter” fares. Standard seats can be reserved for free with “Starter Plus”, “Starter Max” and “Flex” fares.
Lufthansa
Advance seat selection chargeable (EUR17-55 for seats towards the front of the Economy cabin, and EUR 10-35 for other Economy seats).
Charges are waived for Economy Classic and Economy Flex passengers, and Senators and HON Circle members of Lufthansa’s Miles & More Frequent Flyer Program, depending on the route.
Any available Economy seat can be reserved for free once online check-in opens.
Malaysia Airlines
Advance seat selection chargeable (RM11-100) for all standard Economy seats. Enrich Platinum members are exempt.
Qantas Airways
Advance seat selection chargeable (AUD15-35) for "sale fares" in international Economy. Qantas Silver members and above, and oneworld Ruby / Emirates Skywards Silver members and above, are exempt.
Any available Economy seat can be reserved for free once online check-in opens.
Qatar Airways
Advance seat selection for preferred seats towards the front of the Economy cabin is only available to Qatar Airways Privilege Club Silver members and above, oneworld Ruby members and above, and passengers paying the highest Economy fares.
Any available Economy seat can be reserved for free once online check-in opens.
Shenzhen Airlines
No advance seat selection. Seats can be reserved for free once online check-in opens.
Singapore Airlines
Advance seat selection chargeable (from USD8) for passengers booked on “Standard” and “Lite” fares to reserve seats towards the front of the Economy cabin. PPS Club and KrisFlyer Elite Gold members are exempt.
Advance seat selection chargeable (from USD5) for passengers booked on “Lite” fares to reserve other Economy seats. PPS Club, KrisFlyer Elite Gold and KrisFlyer Elite Silver members are exempt.
Any available Economy seat can be reserved for free once online check-in opens.
Spicejet
Advance seat selection is chargeable (INR99-1000 on domestic flights; INR 250-1000 on international flights).
Thai Airways
Advance seat selection is not permitted.
Any available Economy seat can be reserved for free once online check-in opens.
United Airlines
Advance seat selection for preferred seats towards the front of the Economy cabin is chargeable (from USD9).
Other Economy seats can be reserved in advance for free, except by passengers on a Basic Economy ticket who will have to pay a fee.
Compiled based on information provided by the airlines and/or information available on their websites on 19 June 2019. CWT does not take responsibility for the accuracy of this information.