‘Dynamic flying’ hitting corporate budgets

SINGAPORE – The impact of soaring fuel costs is forcing companies to reassess how they plan and manage all aspects of their business travel, according to FCm Travel Solutions.

The growing number of airlines cancelling services and grounding aircraft has sparked a new era of ‘dynamic flying’ that is affecting schedules, costs and productivity for business travellers in many parts of the world – with the full impact yet to come, FCm says.

FCm’s global executive general manager, Anthony Grigson, said it was becoming more challenging for corporate travellers to fly where and when they wanted to.

“The days of airlines flying half full are fast disappearing,” he said.

“They are now firmly focused on the return on investment for every seat and every takeoff, so we are now seeing reduced frequency on low-yield routes, as well as reduced capacity and onboard service on other routes.

“In some markets, bookings made up to a week in advance are no longer guaranteeing well-priced seats, and we’re seeing more of our clients being forced to travel economy on relatively high fares.

“Reduced availability and higher fares, particularly on monopolised or highly frequented routes, is creating inconvenience for business travellers and blowing out their budgets.

“The corporate sector is also being affected by last minute flight cancellations, then waiting for hours before the next flight. Travellers now need to arrange their journey with the expectation that it may be disrupted on the day.”

Grigson said that while corporate travel remained strong and airfares were still competitive in some regions, FCm was anticipating a further rise in the cost of fares and inconvenience to travellers worldwide.

“As a travel consultancy, FCm is playing the role of ‘infomediary’ and advisor for our clients in these fluctuating conditions.

“Travel management needs to be strategic, to factor in rising airfares and other costs now being introduced or flagged by airlines – such as baggage fees, and extra charges for preferred seating, in-flight meals or entertainment.”

Grigson added that in the longer term, the fuel crisis could pave the way for other major developments in the air and hotel sectors.

“In the skies, we could see a higher percentage of aircraft that are modern, fuel-efficient and environmentally friendly, as airlines implement a range of strategies to manage the situation.

“And in the accommodation sector, we could see hotel companies reviewing their capacity forecasts and re-negotiating their rates sooner than they normally would.”