ASH UPDATE – Big business travel financial hit from flight shutdown
Monday, 21 Apr, 2010
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Almost three quarters of business travel buyers and managers have suffered a “substantial” economic hit on their travel spend due to the grounding of flight in the ash cloud crisis.
Seventy-one percent of global travel managers/buyers responding to a survey by the Association of Corporate Travel Executives indicated they had been affected.
Of this number, 36% described the unanticipated expenses as “severe,” while 35% cited it as “moderate.”
An additional 21% indicated the hit was slight, while eight per cent reported being unaffected.
Thirty one per cent of the ACTE survey respondents claimed their greatest challenges resulted from stranded travellers and cancelled meetings.
Nineteen per cent cited stranded travellers as their primary concern, while cancelled meetings were a major issue for 11%.
Twenty two per cent indicated that stranded travellers, cancelled meetings, reduced sales calls, and increased expenses were simultaneous priorities. A remaining 11% said they were not affected at all.
Less than half (47%) of companies responding to the ACTE survey had a plan in place to accommodate stranded travellers.
Twenty-nine percent did not have a specific program for this crisis, but moved forward with implementing one cobbled from other crisis programs.
A quarter believe this crisis is so extraordinary and rare, that no preparation could have dealt with the developments and have no immediate intentions to change their policies.
“It is important to note that the financial factors of this crisis have a special significance in the light of the fragile global economic recovery for business in general and business travel in particular,” said ACTE president Richard Crum.
“If even just one per cent of the industry’s financial contribution to the global economy were affected, that would equate to roughly €4 billion.
“However, with that said, our survey confirmed that our members agree that safety of all travellers should continue to be the primary focus.”
UK based ACTE president-elect Chris Crowley, who was stranded in the US, said: “The unanticipated loss of air service for hundreds of thousands of business travellers has played out in dramatic fashion.
“Travel management resources are being stretched to the limit as every effort is being made to return travellers to their families.
“ACTE members — travel managers, travel agents, travel management companies and suppliers in 82 countries — have been working 24 hours a day, since the middle of last week to bring people home. This is their challenge, their commitment, and their promise.”
Moving quickly after many northern European airports were closed, alternative transportation was available to 56% of the survey’s respondents. Of this group, 16 percent reported they were able to move travellers via rail, ferries, coach and by chauffeured surface transportation, while 40% stated this was an option for a much smaller number of their travellers. Forty four per cent indicated there were no other alternatives for their travellers.
In the section on government response, 54% of respondents said “No” to the question, “Did government agencies react too quickly in closing airports?”
Thirteen percent said “Yes” and 34% were “unsure.”
Responding to, “Did government agencies respond too slowly to reopen airports,” the numbers shifted slightly, with 39% saying “No,” 25% saying “Yes,” and 35 percent claiming to be “unsure.”
The unanticipated expense of this crisis has already taken a big bite out of existing travel budgets for 2010. In answer to the question, “Would the cost of this crisis force your company to travel less in 2010,” 76% responded “No.” Twenty-two per cent were unsure, as the crisis is ongoing, while two percent said, “Yes.”
ACTE sought the answer to “what if this eruption were to continue for months or even a year,” resulting in travel patterns determined by ash clouds. How would companies respond to that?
Twenty nine per cent of respondents said they would rely on a strategic response combining rail travel, ground transportation and electronic travel alternatives as an immediate travel hybrid plan.
Thirteen per cent reported they have a program for electronic travel and meeting alternatives in place now.
Thirty nine per cent indicated they had both a strategic response and a plan in place now, while 19% felt confident they would need neither.
by Phil Davies
Phil Davies
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