DATA
12.5 per cent,” says Gillies. However, the number of air tickets bought through Amex corporate payment products rose only 1 per cent and actually fell 1 per cent in the UK. The number of hotel transactions fell 2 per cent.
Pulling apart these figures, it
therefore appears that companies are driving greater efficiencies by channelling a higher proportion of their spend through corporate payment products, but underlying travel spend is on the decline. The same trend is clear in figures from Airplus International, which handled 5 per cent fewer tickets for existing clients in the UK in 2012. As the table below shows, ticket numbers fell in every single market in Europe, with the sharpest drop of all in Germany (down 9 per cent). In the US, however, where the economy last year grew faster than on this side of the Atlantic, air transactions grew 2 per cent.
IS YOUR TRIP NECESSARY? Although the Airplus figures might suggest companies are slashing their travel budgets once more as the global economy struggles, UK managing director Yael Klein is inclined to make a more benign interpretation. “If you talk to customers, they are not saying they are cutting back on travel,” she says. “Travel is stable now. We have learned that panic reactions do not help the company.” Instead, Klein believes, the drop in
transaction numbers reflects growing maturity among employees, and their bosses, in deciding whether or not it is worth making a trip. “I travel far less than I did four years ago,” says Klein. “I don’t want to travel because of my young daughter, and what I have found is that it is no longer frowned upon if I don’t go. It is much easier now to ask if you can dial into a conference call instead. I used to fly to New York pretty much just to have coffee with a customer. Now we will have that chat on the phone. It is a myth that travellers want to travel a lot – the majority would like to cut back.” As is the case with Citi, Airplus
customers are finding it hard to save In association with
on their total travel bill because a fall in trip numbers is being balanced by an increase in average ticket price. In the UK last year, that price was Ð525, up from Ð505 in 2011, and an increase for the third year in succession. “There was nothing unusual about these figures,” says Klein. “They reflect inflation and perhaps something extra for additional taxes.”
RISE AND FALL Globally, this was also the third year in a row that the average ticket price rose, although the increase was
less than in the UK, up from Ð543 to Ð552. However, Airplus global figures are skewed by its dominance
Companies are driving greater efficiencies by channelling a higher proportion of their spend through payment products
of the German market (where it has a 65 per cent market share), so the figures need examining on a country- by-country basis. They show that the average ticket price actually fell in a couple of countries (down from Ð674 to Ð656 in France and Ð654 to Ð621 in the Netherlands). Overall, the Airplus figures suggest British companies enjoy lower fares
AVERAGE AIR TICKET PRICE PAID BY AIRPLUS INTERNATIONAL CUSTOMERS, 2009-2012 (all prices in euros)
GLOBAL UK
BELGIUM
SWITZERLAND FRANCE
GERMANY ITALY
NETHERLANDS US
customers 2011-2012
2009 2010 2011 2012 * 475
435 -
866 694 495 475 587 415
525 485 769 856 652 517 525 654 432
528 505 769 789 674 545 543 654 440
553 525 779 887 656 557 552 621 447
-
-5% -2% -7% -1% -9% -5% -3% +2%
Source: Airplus International * Increase/decrease in number of air tickets bought by existing
than all of their counterparts in Europe. Only the US, where there is a higher preponderance of domestic flights, has a lower average ticket price. Incidentally, the top domestic, European and long-haul routes booked by Airplus UK customers are London to Glasgow, Amsterdam and New York respectively. One reason UK business travellers may pay less than their European peers is that they are much more likely to fly on low-cost carriers. No fewer than 22.2 per cent of UK bookings are on budget airlines, a figure that has barely changed for the past three years. This compares with only 13.8 per cent of Airplus customers globally flying low-cost. What is more, this global figure has dropped from 14.7 per cent in 2011 and 16.3 per cent in 2010. Once again, however, it is important to recall the German bias of the figures. Lufthansa, which is Airplus’s parent, is dominant in Germany, and its main low-cost rival, Air Berlin, has suffered a decline in fortunes over the past couple of years. The Airplus statistics also show that 91 per cent of bookings by UK customers are in economy class, while 8 per cent are in business class, and a mere 1 per cent in first class. As with the low-cost carrier figures, these numbers have not changed for the past three years. They suggest that while the steep decline of business class over the past decade has been arrested, it does not look set to make a recovery either. “Once you’ve got travellers used to economy, why would you go back?” asks Klein. Most other countries have similar
figures for the number of passengers flying in business class. However, for both Italy and the US, the figure is only 5 per cent, while Germany is higher at 12 per cent. Highest of all are Belgium and Switzerland, where no fewer than 20 per cent and 22 per cent respectively of tickets continue to be in business class. Not surprisingly, these two countries also have the highest average ticket prices:
Belgium is Ð779 and Switzerland is Ð887, the latter a massive 69 per cent higher than the average ticket price for the UK. n
2013 Buying Business Travel • 17
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