Business travellers may be stuck in coach

CORPORATE TRAVEL             IATA                  QANTAS

Global - Corporate travel buyers were putting their business travellers in economy class during the recession but may continue to do so even as global demand picks up, said the IATA.

Travellers may not move back to business class as companies seek to implement permanent cuts to their travel budgets, the association explains.

According to IATA's latest figures, premium bookings advanced 1.7% in December from a year earlier, the first gain in 18 months, but economy class traffic rose 5% even as the economy picks up. This suggests that business travellers are staying in coach, IATA said.

"We think it is reasonable to assume that changes in the number of economy - as well as premium - seat sales are being driven to a larger extent by business travel rather than leisure," the association said.

First- and business-class bookings rose in December for the first time since May 2008, recovering from declines that reached 25% in May last year.

Airlines too, are adjusting their seating capacity in light of the shift in business travel procurement. Qantas Airways said it will cut back on its first class service, after announcing a 72% drop in half year profits to US$52 million.

"Our first class product will remain on key routes," said CEO Alan Joyce. "It's a restatement of our investment in premium seating but we think the balance between first, business and premium economy needed to be readjusted."

________________________________________________________

Managing people? For HR and leadership strategy, Human Resources has it covered.

Get your marketing department up to speed with Asia's most read marketing site
marketing-interactive.com