Monash University Procurement Travel user Group Update August 2008

1. Monash University Procurement Travel user Group Update August 2008

2. Agenda • Objectives – Monash University Travel Office • Current Situation • Strategies • Travel Policy Recommendations • Preferred Supplier Engagement • Policy Examples • Changes to International Air Travel Suppliers • Travel Manager Contract Negotiations

3. Travel Advisory Office Objectives Negotiate better prices and terms for travel goods and services • Identify potential new suppliers • Negotiate with current and new suppliers on both products and services • Create cost reduction opportunities through consolidation Change Specifications • Encourage the development of simplified standards • Encourage more widespread use of standards • Identify and use lower cost suppliers that meet the Universities quality and compatibility requirements Build Internal capabilities to manage total travel expenses • Build internal travel management capabilities • Encourage ‘open markets’ that self regulate specifications and contain costs • Encourage cooperation and sharing of information and best practices across all stake holders

4. Where we are at today Domestic Travel Consumption • 90% of travel between Melbourne, Sydney, Canberra, Brisbane and Perth • Domestic spend approximately $2.6 million • Leakage approximately 50% ($1.3 million) outside the preferred travel managers • Qantas / Virgin Blue preferred domestic airline agreements International Travel Consumption • Complex travel requirements to over 120 destinations throughout the world • International spend approx $10.2 million • Leakage approximately 22% ($1.8 million) outside preferred travel managers • Qantas / Singapore Airlines / Malaysian Airlines international preferred agreements

5. Strategies • Update travel policy • Domestic • International • Source new preferred airlines that will support Monash travel requirements • Align TMC’s to the requirements of the University (and that of the University preferred suppliers)

6. Travel Policy Recommendations Domestic • Economy class travel only unless approved by the Faculty Dean or Divisional Director • Traveller to book lowest available fare within 30 minutes of the travellers preferred departure time • Lowest available fare is not restricted to travellers endorsed airline or type of fare required for travel i.e. restricted / non-restricted International • Economy class travel only unless approved by the Faculty Dean or Divisional Director • Travel should be based on lowest available fare taking into consideration the following criteria: • Total cost of fare including applicable taxes • Total journey time • Utilisation of Monash endorsed suppliers

7. Domestic Policy Example User Email Request 22 July – Melbourne to Sydney Depart 0800 on Qantas TMC Response TMC Response Qantas QF414 0800 $355.95 Virgin Blue DJ817 0745 $210.50 Virgin Blue DJ821 0815 $174.50 TMC notes that Virgin Blue provides lowest fare within policy guidelines and seeks travellers instructions to what their preference is i.e. Book Qantas or book the lower cost Virgin Blue flights If the traveller chooses the Qantas fare, the TMC requests reason for doing so and records the response and the lowest fare offered for reporting purposes If the traveller chooses the Virgin Blue fare, the TMC records the lowest fare as being accepted for reporting purposes

8. Domestic Fare Comparison Melbourne to Sydney – 12 August Departing 0800 • Both Virgin Blue and Qantas have similar fare rules • Restricted fares are non refundable but can be upgraded to a higher class fare • Non restricted fares are fully refundable and can be changed subject to availability Insight Statistics show that 26% of travel is being booked on Qantas Non Restricted fare types.

9. Preferred Supplier Engagement - Domestic • Qantas agreement to remain in place (due for review Nov 2008) • Virgin Blue agreement to enhance domestic program Qantas fares consistently higher than Virgin Blue Change in policy will encourage low cost fares to be used by travellers Melbourne to Sydney Average Ticket Price (source Serko)

10. International Policy Example User Email Request 15 October – Melbourne to London (return 23 Oct) Qantas TMC Response TMC Response Qantas $2329.00 (tactical fare) Malaysian Airlines $2156.00 (tactical fare) Cathay Pacific $2209.00 (negotiated fare) / $2358.00 (tactical fare) TMC notes that Malaysian Airlines provides lowest fare within policy guidelines and seeks travellers instructions to what their preference is i.e. Book Qantas or book the lower cost Malaysian Airlines flights If the traveller chooses the Qantas fare, the TMC requests reason for doing so and records the response and the lowest fare offered for reporting purposes If the traveller chooses the Malaysian Airlines fare, the TMC records the lowest fare as being accepted for reporting purposes

11. Airline Pricing – Advance Purchase (2 months) • The further in advance travel is booked, the more likely a tactical fare will provide greater savings that what Monash negotiated fare will Low Season Economy Class Fares to London Departing 15 October (source airline websites, Monash airline negotiations)

12. Airline Pricing – Advance Purchase (2 weeks) • The closer travel is booked to the departure date, the more likely a negotiated fare will be used High Shoulder Economy Class Fares to London Departing 15 August (source airline websites, Monash airline negotiations)

13. Airline Pricing – Business Class • Monash receives significant discounts on business class travel through preferred relationships Business Class Fares to London Departing 15 August (source airline websites, Monash airline negotiations)

14. International Air Travel Suppliers Competitive RFI / RFQ process conducted by the Monash Travel Office focusing on the following criteria: • Frequency and schedules to Monash top tier destinations (Europe, Asia, USA and South Africa) • Airline services • TMC support services • Price • Contract terms • Environmental

15. Understanding the Benefits – Airline Scorecards

16. Sample Airline Scorecard – Cathay Pacific

17. Contracts to assist Monash manage their budgets • Price of aviation fuel will continue to push fares up over the next 12 – 18 months • Objective was to negotiate fixed price net fares over a 12 month period • Published fares geared to price increases within the market (this calendar airlines have increased fares on average 14%) Aviation jet fuel $US per litre (source US Department of Transport)

18. Managing the Travel Management Companies • HRG and Voyager Travel remain as Monash endorsed Travel Management Companies • Two year contract with a one year option (at the sole discretion of Monash) • New agreements made up of three parts: • General terms (Monash driven) • Supplier Services Schedule • Supplier Service Level Agreements • Key features of the new contracts: • Normalised pricing (clear understanding of how pricing is applied by the TMC’s) • Standardised services between the two TMC’s • Standardised Service Level Agreements (although agreed thresholds may differ) • Standardised reporting • Standardised quarterly review processes • Introduction of business continuity documentation and service recovery processes

19. Travel Management Pricing Update Key Points • Standardised pricing between the two TMC’s Voyager Travel • Increased domestic online booking fee from $10 to $12 per ticket issued • Increased domestic booking fee (traditional) from $25 to $26 per ticket issued • Introduced an international booking fee of $135 for international bookings with equal to five or more sectors • Maximum CPI increase on fees for year two of contract HRG Australia • No increase in fees within the new agreement • Maximum CPI increase on fees for year two of contract • Decreased fees on international booking fee from $155 to $135 in April 2008

20. Updates • Group information sessions • Blog (http://blogs.monash.edu.au/travel) • Email (traveloffice@adm.monash.edu.au) • Intranet