Business Travelers Tighten Budgets As Airfares Rise
Jun 13th, 2008 | By admin | Category: Education, TravelEconomic outlook, 79% of business travelers are feeling pressure from their employers to cut travel expenses, according to a new survey.
sponsored by Orbitz for Business, a unit of online travel company Orbitz Worldwide Inc. (OWW), and Business Traveler magazine - one-third of respondents said their main concern is cutting the cost of air travel. That’s not easy, since airlines this year have increased fares to cover the skyrocketing cost of jet fuel.
For example, he said, a typical corporate travel policy has been to allow employees to choose flights that fall within around $100 of the lowest available fare. That gives travelers more choices of flight times, carriers and nonstop flights. Now, he said, some employers are limiting travelers to choices within just $1 of the lowest fare. “Companies have said they can save 4% to 5% by adopting that policy,” he said.
For international flights, some corporate travel departments are offering employees a free companion ticket if they fly economy class rather than first class, Sivley said.
In general, he said, corporate travel departments continue to shift from traditional travel agencies, where fees are higher, to online travel companies.
Airlines depend heavily on revenue from business fares, which cost more than so-called leisure fares, because they can be changed without a penalty, and can be purchased at the last minute. As well, corporate travelers are the main customers for premium class seats, either business class or first class.
Geography is also a factor in ticket prices. Overall, travelers between major markets - including a substantial number of business travelers - on average pay much less for tickets than travelers in small cities. That’s because major airlines have kept fares down to stay competitive on routes flown by Southwest and other low-cost carriers.
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