Companies forbidding first-class travel
In a move that has implications beyond business travel, two-thirds of North American companies now forbid employees from riding in first or business-class seats.
And nearly three out of four companies revised their travel plans in the past two years to cut costs, according to a survey published by Egencia and the National Business Travel Association Foundation.
“Those results of a new survey of corporate travel managers…show companies increasingly are pushing workers to buy non-refundable fares or at least get what’s called the ‘lowest logical fare,’” the study says. Typically, that’s the lowest-priced fare that doesn’t cause travelers to take wildly circuitous routes, cause them to miss important engagements, incur an extra night in a hotel or lose productivity.
Still, North American companies, which spent an estimated $48.7 billion on airline tickets in 2009, could save almost $30 billion combined annually if they instituted and enforced stricter travel policies that required non-refundable tickets or the lowest logical fare. That’s according to the survey’s publishers.
Despite revised travel policies, Christophe Peymirat, vice president of global marketing at Egencia, the corporate travel arm of online travel site Expedia, says pushing corporate travelers to use non-refundable fares is "far from commonplace."
"Based on our research, companies … can save as much as 38 percent by encouraging travelers to be flexible," he says. That includes looking for cheaper tickets on flights that depart up to two hours before or after the desired departure time, and being willing to take less-expensive connecting flights rather than non-stop flights.
Tougher controls on when corporate travelers purchase premium seats doesn’t mean they’re no longer sitting up front. But if they are, it’s increasingly because they are using their elite frequent-flier status to upgrade from the coach tickets their companies require them to buy.
The downshifting to cheaper tickets, along with an overall drop in travel demand during the recession, helps explain why U.S. airlines lost US$26.3 billion in 2008 and 2009.
But what of any future rebounding? Questionable, if business travel continues on the cheap, observers say.
By David Wilkening
David
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