Greek Aegean centralizes foreign sale management – example for LOT ?

Greek Aegean indicating direction for medium size airliens? The future of GSA on small markets can be threatened? A global trade team is a solution for LOT?

COVID forces cost-based restructuring for airlines, Greek Aegean goes firmly into foreign sales centralization. Eliminates GSA and appoints a global trade team.

Liquidation of GSA agents on nonstrategic markets – like Poland

Aegean is another airline of which representation in Poland disappeared with the end of 2020. This fact seemed a great surprise because the carrier dealt well in our country perfectly. Before Pandemian, he managed to even win competitions on the route to Athens with LOT. The line also enjoyed a large and growing demand for groups. It all told to think that Poland can be one of the strategic markets in the CEE region.

Unfortunately, Pandemia forced to redefine this approach. Management Aegeana after calculating costs considered that the future direction is the centralization of sales management as well as Global Group-Desk. Bold but a very logical approach. We wrote about him in the context of PLL LOT and restructuring ideas.

What arguments spoke for this approach

In the case of Poland, Aegean certainly assumed that can easily contrats a large volume of groups with key operators as ITAKA Rainbow or Grecos. The high level of those groups conducted directly from the HQ level can give guarantees of profitable flying to Warsaw/Cracow.

Certainly, the traffic to Greece is not a corporate and high yield one, holding commercial forces or paying GSA, therefore, there is no major sense in the context of almost no existing business traffic.

Directions such as Greece are also characterized by the great share of OTA sales, in the Polish case it is mainly ESKY. Also, this contact can be easily managed from the headquarters, you do not have to pay from this sales – commission to GSA agent. And the funds saved in this way can be invested in advertising contracted directly with an internet agent.

Mark up and group fees – these “recovered” costs can amortize losses

It is worth noting that AEGEAN is a typical example of a carrier living from groups. So he was a gnomic helmet for GSA agents in Poland. In principle, one of the three most lucrative clients next to Tap and Fly Dubai, all thanks to the groups.

GSA agents supporting these types of clients have long introduced Quasi-monopoly for the Group sales process –  group could be bought / reserved only through them. Naturally, for a suitable fee, which usually started from 50 PLN per pax. It also happened that the price designated by the lines was often additionally mark-up, i.e. a specific amount was added to it prices which was a pure GSA agent’s earnings.

If we accept that the airline transported tens of thousands of group paxes a year from Poland, this additional “costs”  on the market went to hundreds of thousands of zlotys. Centralizing the service carrier can count on “recovery” of these values. Certainly this is the main element in Business Cases closing representations in a given country(Poland).

In addition to the pros, however there are cons as well

Definitely, such a bold step carries a certain kind of risk. Especially in the market area where a special personal relationship is required.

As for the Greek carrier, you can expect some drops in the MICE, Pilgrimage Segment or niche groups (sports ). Apparently, however, it was considered to take such a risk.

Global trade team and Desk groups (with handling in English)

Of course, to be able to introduce such radical actions, a smooth global trade team is necessary. And in the case of a Greek carrier, the key is also effective groups Desk.

Greeks decided to invest in these two areas, following the way which some time ago he has already set, among others Scandinavian SAS. A similar approach tried to use technically “Fallen” CSA.

As we emphasized in an article dealing with LOT, creating a global trade team, we also get one of the Handicap. With time, we will have an elite trading team at your disposal – in such a team every sales adept will want to work. So we have a chance to create an interesting career path inside Commercial Division.

The key to the effective implementation of the model is naturally the excellence of handling the most important clients, they must be taken in a way. The global team must also watch over the new market opportunities that from the center/HQ perspective can easily stink.

Can this model be adjusted to the hybrid – support by local commercial free-lancers ?

It seems that ultimately, such a model can be completed yet. You should find a local manager’s Sales with which you could establish cooperation on the project base. Based on, for example, the number of meetings  / visits to regional agents/corporates or representation on fairs or consultancy in advertising activities.

Using a hybrid, one could supplement/eliminate the gaps of a global approach. Such models are successfully used by foreign DMC represented, among others in Poland.

What applications for LOT

Certainly steps taken by Aegean are another tip for LOT. This was also undertaken to reorganize foreign sales by saying a number of GSA contracts in Western Europe. Unfortunately, you can not hear information about the creation of a modern global sales team or global group desk yet.

LOT  has the additional advantages of which there are lacks from Western Europe or Scandinavia. Its global sales support Team or/end Group-Desk could be located on the “east wall”, additionally significantly reducing the costs and risk of employee rotation. In addition, gaining easy access to the Russian / Ukrainian language team.

Certainly, it can not be escaped from more radical restructuring activities, especially since the profile of many lines evolves towards holiday connections (cheaper traffic requiring cost excellence ). It is worth observing what carriers do to cope with this challenge. Greek example is really interesting.