The Business travelers coming back?

[General Lee]

Positive Economic Trends Seen Fueling Business Travel Upturn
Friday January 30, 9:01 am ET
Business Travel Managers Cautiously Anticipate Recovery


ALEXANDRIA, Va.--(BUSINESS WIRE)--Jan. 30, 2004--Business travel appears headed for a rebound later this year and into 2005 as the economy continues to improve and international tensions abate, according to a new survey of business travel management professionals conducted by the National Business Travel Association (NBTA).
Nearly three in four (71%) of the business travel managers participating in the survey believe that business travel will rebound significantly in 2004 and into 2005, with more than half (54%) predicting the recovery to occur sometime this year. The survey suggests a consensus among business travel managers that the recovering U.S. economy will promote more business-related travel.

"The economy and business travel are closely related, as one helps drive the other," said Carol Devine, NBTA President and CEO. "While the challenges of the past few years have taught us to be cautious," Devine continued, "economic trends and travel purchase indicators bode well for an increase in business travel - with the possibility of significant volume increases at the end of the year and into 2005."

In a continuing effort to promote business travel recovery, travel management professionals report a growing commitment to the purchase of mid-priced hotel accommodations and airfares from discount airlines. Nearly two out of three participating in the NBTA survey say they will utilize these options at least as much or more frequently in 2004 than they did in 2003.

Nearly one-half (48%) of those surveyed report an increase in corporate travel budgets for 2004, with fewer than one in five (18%) experiencing a decrease. The survey also found that hotel prices and airfares likely will remain flat during 2004, with about one in ten (11%) of the managers surveyed actually anticipating a slight decrease in fares.

The NBTA survey was conducted online. It was available for participation by NBTA Direct Buyer members from December 24, 2003, to January 13, 2004. The survey results are based on the answers of 220 respondents.

The National Business Travel Association, established in 1968, represents over 2,400 corporate travel managers and travel service providers. NBTA members manage and direct more than 70% of expenditures within the business travel industry. NBTA is committed to the professional development of its members and offers educational and training opportunities. It is the source for critical information about the business travel industry.


Bye Bye--General Lee

PS--I didn't say the higher fares were back...

 

[MedFlyer]

The survey also found that hotel prices and airfares likely will remain flat during 2004, with about one in ten (11%) of the managers surveyed actually anticipating a slight decrease in fares.

PS--I didn't say the higher fares were back...

But that's exactly the problem. More people are flying, but they are doing it for far less than ever before. The majors have lost virtually all pricing power in the domestic market. Majors are now to the point of offering transcon fares for $79 one way. You'll never make any money on fares like that.

You want to know the greatest threat to the pilot profession? It's not Mesa or RJ's or cabotage (all of which are threats), it's a continuing decline in fares to a level that is so low only a handful of LCC's will ever remain profitable.

The reality is that fares (when adjusted for inflation) have been on a steady descent ever since deregulation. They've spiked up for a few brief periods (ie the late 90's), but the overall trend is downward. If this trend continues, the piloting profession is going to continue to suffer.

 

[RichardFitzwell]

Glad to hear business travelers might be returning.

I'm sure many business travelers miss the amenities the legacy airlines once offered (first class, clubs, etc.). LCCs are great and they serve their purpose. If I were traveling for business on a weekly basis, I would get tired of the once or twice a year leisure travelers that start their vacations on the flight.

At first I thought Discovery’s “Airline” was going to be a great on-going advertisement for Southwest. After watching the show a couple times I think it actually has the opposite effect. Wal-Mart travelers at their finest. Drinking, partying and cussing seem to be the norm. Given a choice, I’d pay a little more to avoid this type of bs.

Just my opinion…

 

[General Lee]

Medflyer,

You can't say that we have the same cost structure as we did pre-9-11 either. We have 16,000 less employees, (including 2500 less pilots---1060 of which are furloughed) more kiosks, etc......We are not the same as before.

Bye Bye--General Lee

 

[wms]

In a leadersip class before the economy tanked, our CP said that at a forum he attended at DAL, a mgmt person said that the business traveller was 15% of the volume and 75% of the revenue at DAL. This was why the business travellers got treated so well and leisure travellers were unintentionally lost in the shuffle. We won't see those numbers again, but the business traveller is important and if DAL wants to capitalize on them they need to consider them more.

They've already made it easier for them to use their points for upgrades, but there is nothing to upgrade to on RJs and single-class 737s. As we know, if you spend a lot of time on the road you need to be comfortable. The worst part of doing business shouldn't be getting there. There are city pairs best served by RJs that allow the convenience of bypassing a hub and that is one thing. But a route structure that focuses on RJ travel and only uses mainline as the exception will drive away the most profitable sector of the industry. Business travellers will be willing to pay more for DAL service (we hear them in the gate area bragging on their cell phones about being in first class), but only if they get more than the LCCs offer. But, if the service is the same they'll go with the least expensive. That kind of thinking is what makes them businessmen in the first place.

 

[MedFlyer]

Medflyer,

You can't say that we have the same cost structure as we did pre-9-11 either. We have 16,000 less employees, (including 2500 less pilots---1060 of which are furloughed) more kiosks, etc......We are not the same as before.

Bye Bye--General Lee

Actually, yes I can. DL has done very little to lower unit costs.

Yes, DL has less employees, but you also have far fewer planes. Therefore, your actual unit costs (the cost to fly one person one mile) haven't gone down. Fundamentally, DL has not restructured its costs (and I'm not just talking about pilots).

 

[mach zero]

At first I thought Discovery’s “Airline” was going to be a great on-going advertisement for Southwest. After watching the show a couple times I think it actually has the opposite effect. Wal-Mart travelers at their finest. Drinking, partying and cussing seem to be the norm. Given a choice, I’d pay a little more to avoid this type of bs.

Richard,
You must not have flown very much since you were furloughed. Today, the legacy carriers are fare matching the LCC's with less than $100 tickets. The element you speak about above is now traveling on them as well. Paying a little more for a ticket on a legacy will not get you a seat in a luxury jet with only fellow business travelers, it just means you paid more for the ticket. I have seen plenty of "Wal-Mart" passengers that carry their belonings on board in a Hefty garbage bag flying on AA and Delta lately (as I commute to work).

 

[RichardFitzwell]

mach,

You're right. I haven't been in a passenger terminal more than a half dozen times since furlough.

I was thinking that business pax could seperate themselves a little by securing a first class seats and using airport clubs. I'd be willing to pay extra for that.

But, as wms brought up, there is no incentive for paying extra for tickets on a single-class aircraft (RJ or 737).

It seems many things have change with the airlines in recent years. I am starting to wonder if I really want to return.

 

[furloughfodder]

..... I have seen plenty of "Wal-Mart" passengers that carry their belonings on board in a Hefty garbage bag flying on AA and Delta lately (as I commute to work).

Good point. It is a shame to watch this profession of ours be degraded so much by the low-cost carriers. Thanks to Southwest, JBLU, Critter, ATA, etc we are all now nothing more than glorified bus drivers.

 

[mach zero]

Originally posted by furloughfodder

Good point. It is a shame to watch this profession of ours be degraded so much by the low-cost carriers. Thanks to Southwest, JBLU, Critter, ATA, etc we are all now nothing more than glorified bus drivers.

You know Furloughfodder maybe it is you all at AA who are pulling us down since your max 777 CA rate is now almost $20 / hr less than our max L-1011 CA rate. As we go into negotiations for a 767 rate in the near future we will have our mgmnt pointing to your 767 rate while they are asking us why we want L-1011 pay for the 76.

Keep on thinking it is us at the LCC's and not your bloated fat cat AMR upper managers who are to blame for all this. I'm sure that will get you recalled much sooner.

 

[RichardFitzwell]

It is a shame to watch this profession of ours be degraded so much...

I don't think it only happens in aviation. Just ask the Optometrists working at Wal-Mart.