BTN Europe presents an overview of business travel and MICE predictions for this year
Virtual Event - 1 October 2020
ExCeL London - 22-23 June 2021
Bosses at travel payment company AirPlus International said a recovery in the corporate travel sector had started.
But while road warriors are digging out their suitcases, the German-based company warned that the landscape of business travel had changed, possibly forever.
In a meeting with press at the company's UK headquarters, chief executive Patrick Diemer said airlines may be wise to close business class cabins altogether, though his remarks were made slightly tongue-in-cheek.
According to AirPlus figures, the average cost of an airfare in January this year was up £6 year-on-year to £405, a slight improvement. But transaction volumes had risen "significantly" during the first three months of 2010, he said.
Diemer revealed that about 50% of the company's existing customers had either stopped or decreased travelling, while the other half had the same volume of trips but were looking for the cheapest possible tickets.
And he said the decline in business travel was caused by both less travel and lower ticket prices.
"The UK recession hit earlier and left earlier. But I fear they [corporates] will keep revised travel policies intact even if the economy improves. So business class will not return. If it keeps going the way it is I think they can close business class."
He added: "In the recession travel managers had more power internally that ever before. I think they will try and hold onto that power."
He said only one AirPlus customer had allowed its employees to return to the business class cabin.
According to the company's statistics, only 7% of tickets bought in 2010 so far have been in business class. In 2001 that figure sat at 43%.
In spite of the apparent doom and gloom, AirPlus was still able to turn a handsome profit in 2009, albeit after some aggressive cost cutting.
"Internally we cut our travel budget and downgraded class of travel," he said.
"We cut as much as we could in areas such as communications, but we are very proud to say that we did not have to make any redundancies.
"They worst period was in August and September last year, but things are now trending upwards."
Yael Klein, the company's managing director in the UK, said: "We believe we have left the recession and are into the upturn."
Last year, AirPlus launched its corporate credit card in the UK, a move which Klein admitted made her "nervous" given the state of the economy.
But, she said, the recessio turned out to be a "blessing in disguise" for the new product.
"We rolled out more than 30,000 cards in the first year," she said.
"SMEs, particularly, were keen to monitor their spend."
Klein is now overseeing the launch of the firm's latest product in the UK market.
A purchasing card is to be unveiled at the end of June in partnership with Invapay Payment Solutions.
AirPlus is also rolling out carbon reports for customers wanting to measure emissions per transaction.
Green reports had previously only been available to customers who offset emissions.