16 October, etc.venues Monument
30 October, JW Marriott Grosvenor House
1st November 2023, etc.venues County Hall
LAST YEAR'S VOLCANIC ERUPTIONS, cabin crew strikes and harsh winter might have been a secret blessing for one group of people who found themselves grounded - those business travellers whose companies made them fly economy during the recession.
Company travel policies over the last 18 months have taken a distinctly frugal turn and, for some of those unfortunate enough to be affected, there is no going back to the heady days of turning left as soon as they board an aircraft; other employers, however, are again recognising the need to have staff rested and refreshed after a long journey, particularly now that the mantra of corporate social responsibility (CSR) is so prevalent.
There is no doubt that business travellers are on the move again following a hiatus in 2009 and, to a lesser extent, in 2010. The Guild of Travel Management Companies (GTMC), which accounts for 80 per cent of business travel spend in the UK, including six million airline tickets, confirms a bounce back in the number of air fares sold by its members. These were up 12 per cent year-on-year in the third quarter of 2010 and have already exceeded comparable figures in 2008, before the recession took hold.
Figures from the International Air Transport Association's (IATA) Billing and Settlement Plan (BSP) for 2010 show that in that year BSP agents sold air travel worth £7 billion, a 17 per cent increase on 2009. The number of transactions was also up nearly 10 per cent, to 20.5 million. However, it is not all good news. These figures record both business and leisure transactions, and business travel houses privately say they do not reflect their own experience, with their average 2010 values remaining almost flat.
GTMC chief executive Anne Godfrey says: "Air travel did recover in 2010 but not quite to 2008 levels and the mix has completely changed - and probably for the long term." Godfrey believes there will be no going back to the days of premium travel for all, particularly in short haul.
"The fact that Easyjet has launched a business fare shows that it sees it as a growth market," she says. She believes the recession flushed out travel management policies that had been very lax, meaning that only senior employees can look forward to the flatbeds from now on.
"We will not see a wholesale move back to the front of the plane, but seniority will out," says Godfrey. However, Julie Oliver, managing director of travel management company (TMC) Business Travel Direct (BTD) says the current buying environment was not inevitably about downgrading travel.
"People are looking for value, but that does not necessarily mean moving cabin," she says. "Previously, they might have bought a flexible ticket; now they are content to have one that's more restricted.
"We're seeing some movement from business to economy, but more in the government- rather than the private-sector. It has not been as much as you would think. That surprised me, but we're not out of the woods yet."
Nigel Turner, Carlson Wagonlit Travel's (CWT) UK and Ireland director of programme management, sees things a little more positively. CWT's third quarter UK figures show air travel sales up 9 per cent year-on-year, although they still fall short of pre-recession levels in terms of absolute numbers.
Within this figure, business class sales are up 24 per cent. Broken down geographically, it is a consistent picture, with CWT's sales of business class seats up 25 per cent in Europe, 26 per cent across the Atlantic and 25 per cent in other long-haul areas. First class, however, presents another picture - down 20 per cent.
Turner says some firms had increased the number of hours needed to travel business class during the recession - for example, making east coast US an economy flight - but adds: "Overall, the vast majority have not changed their policies, so we are seeing a big increase in business class."
Competition between employers in the same sector is one factor prompting the return to the premium cabins. "Not being able to fly business class long-haul is a major change in employment conditions," Turner says. "There is considerable peer pressure across businesses because it is part of the attraction of working for that organisation."
Duty of care to employees is another reason for the return to the front cabins. "It is not a 'nice to have' thing - rather, it is now part of HR policy. It is very important," says Turner.
As duty of care becomes part of company psyche, corporates are turning to TMCs for advice about the maximum length of time employees are expected to travel in economy.
"We're finding more and more people coming to us for best practice travel policies," says BTD's Oliver. "Most say employees can travel business class if the journey is over four hours, but some have changed this to premium economy. We're saying that you need to be aware of some of the CSR issues."
The GTMC's Godfrey also believes CSR issues are now so ingrained that companies recognise their responsibilities when buying travel. "Any decent employer these days knows they have a duty of care and most travel management policies reflect that," she says.
Mark Cuschieri, chair of industry affairs at the Institute of Travel & Meetings (ITM), agrees.
"Partly because of this, we have seen significant focus and attention towards non-essential travel," he says. "Sensible choices would include alternative modes of travel or alternatives to travel, not least the increased use of conference calls and telepresence."
One thing which is not a duty of care issue, but which is under equally close scrutiny, is short-haul business class.
"In Europe, a number of buyers continue to adopt a 'best-buy on the day' policy," says Cuschieri. "It would appear to be very hard to justify business class on short-haul where the differentiation is minimal."
On these shorter journeys, companies are often now relying on the ingenuity of employees to make themselves more comfortable, according to Ian Windsor, Hogg Robinson Group's (HRG) UK managing director.
"Most employees are members of loyalty schemes and it doesn't take much to build up to silver status and get lounge access when flying economy," he says. "They can then eat and drink before they board. I've seen people fill their briefcases with food to get them through the flight."
In long-haul, Windsor believes the importance of premium economy will increase as we exit the recession.
"Some clients are using the fourth cabin as a default," he says. "You might fly out in it to New York and then be picked up at the airport, but on the way home, if you have to drive or attend a meeting, you will fly business class because the duty of care box has been ticked. When premium economy was first introduced, people weren't sure about it, but it has become very important."
Windsor believes the business travel market faces another tough year, but is over the worst. "It will continue to challenge suppliers to look what they can do for clients - things like giving an extra number of loyalty cards or limos to the airport," he says. "Buyers will look to the suppliers to be innovative and bring in new products."
Despite the economic gloom last year, 2011 will see several major carriers underline confidence in the premium market with the unveiling of new business or premium economy cabins, or upgrades of onboard communications systems.
It may seem a strange time to invest in premium cabins while the economy is still shaky, but such projects have long lead-in times and many were planned well before the economic downturn. In addition, the global nature of the airline industry means that while one economic region may be in recession, another may be doing very well, prompting demand for more premium products.
High on the list of cabin upgrades this year is Air New Zealand's (ANZ), which brings new Boeing 777-300ERs on to the Auckland-Los Angeles-London route from late April with new-style economy and premium economy cabins. ANZ has spent three years developing its premium economy seat, even considering bunk beds, although it rejected these because it decided some passengers would not welcome an undignified climb into the top bunk.
Although not as radical, ANZ has given its premium economy cabin a slick upgrade that, on the LA route, will outclass competitors, particularly British Airways (BA).
On the new aircraft, ANZ's Premium Economy Spaceseat has a 1-2-1 layout, which means that for the solo business traveller, the window seat is by itself, allowing uninterrupted work time. Perhaps more innovative, however, is the design of the middle seats, which allows passengers to swivel to face each other and push their tables together, permitting two colleagues to conduct an in-flight meeting.
ANZ's existing 777-200 fleet will be refitted by late 2012, meaning that the new premium economy seating will also be offered on the Heathrow-Hong Kong sector.
"Premium economy has been hugely successful for us," says an ANZ spokesperson. "Since we introduced it in 2005, we have increased capacity three times. It was the one we definitely wanted to invest in."
ANZ's business cabin remains the same, being almost identical to Virgin Atlantic's (minus the bar area), although it has made some minor upgrades on its new aircraft. There will, however, be little consolation for downgraded business travellers in ANZ's new Skycouch economy seat. This folds out into a bed designed for two, so it is an option that can be ruled out for all but the closest of colleagues.
Another big cabin unveiling this year should be Korean Air's first Airbus A380, featuring its new business class. The aircraft, on which the entire upper deck will be devoted to business class, enters service in May, although it will not appear at Heathrow until the 2012 Olympics.
Korean Air describes its new business class, which has a 74-inch seat pitch, as "one of the most spacious in the industry". The design is still under wraps, but the claim seems justified, as the seats are just two inches shorter than those offered on Singapore Airlines' A380s, which have the market-leading seat in terms of length. Korean, however, promises extra-large seat partitions on its A380 that will be more akin to those found in first class cabins.
This year will see the world's second largest passenger aircraft enter service, a stretched version of the jumbo jet known as the Boeing 747-8.
Lufthansa, one of the few airlines to have committed to it, has ordered 20 to replace its older jumbos and will use the aircraft to correct a glaring omission in its premium service offering - the lack of a lie-flat business class seat. Lufthansa introduced a new first class product when it put its first A380 into service in May 2010, but surprised the industry by not offering a revamped business class. This will now be unveiled when the 747-8 enters service in late 2011. However, it will take several years for the entire 100-strong long-haul fleet, including the A380s, to be retrofitted.
Air France will also reconfigure its A380s this year, but adding a premium economy cabin to the super-jumbo. This means it will be available on flights to New York, Tokyo and Johannesburg this summer. The addition of the new fixed-shell seat is at the expense of economy seating rather than business, another indication that the corporate market is looking up.
First class has been quietly dropped by some airlines over the last few years in favour of a single lie-flat premium product, but some, including the Middle East carriers and BA, continue to invest in it, arguing that with a diminishing number of airlines offering it, more high-end customers are driven to those that do.
BA's latest revamp of first class is due to be complete by the end of the year. The new cabin was designed in the middle of the recession, a fact that did not deter BA. "The idea was that as we come out of recession, passenger numbers pick up, especially in the premium cabins, and to have a product ready to capitalise on that," says a BA spokesman. "The soft products, like the catering, have not changed but the hard product is completely different."
This year should also see an end to the wait for the major US carriers to catch up with the likes of BA and Virgin Atlantic in offering a business class fully-flatbed product on transatlantic routes.
Continental now offers this option on all its Boeing 777 flights, while the it will take several years for the entire 100-strong long-haul fleet, including the A380s, to be retrofitted.
Air France will also reconfigure its A380s this year, but adding a premium economy cabin to the super-jumbo. This means it will be to the wait for the major US carriers to catch up with the likes of BA and Virgin Atlantic in offering a business class fully-flatbed product on transatlantic routes.
Continental now offers this option on all its Boeing 777 flights, while the re-fitting of the narrow-bodied 757s, which serve some Heathrow routes and all its regional services, will be complete by the end of May.
Delta is due this spring to fit flatbeds to the one aircraft serving Heathrow that does not have them. However, it cannot guarantee to offer the new cabins from the regions until 2013.
United Airlines is also in the later stages of upgrading its business cabins and now offers new business and first class products on Boeing 767 and 747 flights from Heathrow. However, not all of its 777s will be reconfigured until the end of the year. United's Star Alliance partner US Airways has already completed its refit, as has American Airlines.
Another carrier that will provide a more comfortable business class this year is Swiss International Air Lines. Its upgraded cabin, featuring a 2m-long flatbed, will be available on all its long-haul routes by July. Refitting of aircraft and the introduction of new Airbus A330s mean that flatbeds become an option on flights to Johannesburg in February, Shanghai in March and Tokyo in April.
One airline that at first appears to be going against the upgrading trend is Virgin Atlantic, which this year brings five of 10 new Airbus A330s into its fleet, beginning in April. In a departure from its previous three-class offering, the first two of these aircraft will have no upper class cabin. These, however, are destined for services to Orlando and other leisure routes, but further deliveries of the new twin-jets will have the full three-class product.
This latter type will operate on routes from Heathrow, with Chicago, Accra, Nairobi, Dubai and Delhi most likely to be first. Virgin will equip them with Panasonic's eXphone system, the same as that installed on BA's all-business-class aircraft that fly from London City Airport to New York. The system provides valuable tools for the business traveller, including text messaging and email via handheld devices, as well as mobile phone calls, which will be allowed on a trial basis.
The system will also be fitted to the 747 fleet based at Gatwick that serves leisure routes, a seemingly perverse decision given the greater need among business travellers for such facilities. Virgin admits that "it's all about iPods and downloading holiday snaps to begin with", but adds that it will refit the Heathrow fleet in time.