‘We charged business travellers too much’ says BA

Business Travel Show 2004 Special: Only a fraction of business travellers are choosing to travel on no-frills carriers, a leading Travel Management Company has revealed, but their presence has had a positive impact on fares. BTI UK said on routes operated by both no frills and scheduled airlines, only 3.5% of clients are being tempted to dumb down. Overall, less than 1% of its clients fly low cost. The findings emerged during a low cost verses scheduled airline debate at the Business Travel Show in London. BTI director of consulting Spencer Smith said a key issue was flexibility – something rarely offered by no frills carriers. “We are working with a lot of corporate clients who make a booking and then change it six, seven or even eight times,” he said. “That’s a problem with low cost fares. They do not have that flexibility.” Time was another factor, said Mr Smith, with some airports used by low cost carriers not centrally located. “Transfers of one or two hours will not wash,” he said. Addressing fears that businesses may start bypassing agents and book their own travel, Mr Smith said a recent experiment revealed it was a time consuming task. “Almost 70% of cases who did it themselves took between 15 minutes and an hour. At BTI, 87.5% of bookings took less than 15 minutes,” he said. Almost half who made a booking were then undercut by BTI who found cheaper deals, he added. Sharon Fattore, head of soft services at Ernst and Young, said there were many factors to take into account when deciding whether to use low cost or scheduled services. “Colleagues may not be able to sit together on low cost flights, there is little flexibility to change flights and there are no lounges,” said Ms Fattore. British Airways UK and Ireland sales director Tiffany Hall appealed to delegates – a combination of travel buyers and business agents – to explore the benefits of its business services. Among the key benefits was BA’s two-class product, she said. “People said Club Europe (business class short haul routes) was dead but a large number of business travellers value the extra class,” said Ms Hall. “In fact, 40% of our European revenue is from people flying Club Europe.” Ms Hall also said the use of lounges and centrally-located airports were of value to business travellers. “They need to use their time productively,” she said. Referring to price, Ms Hall admitted that until two years ago, business travellers were being charged too much by BA. Now many fares are in line with the no frills offers. “It became clear to use that we couldn’t ignore the low cost airlines. We had to fight back,” she told delegates. Flybe head of sales Stephen Hobday said the airline was working hard to attract corporate business and unlike many low cost airlines, is available through GDS’s. It was also striving to make it as easy as possible for the trade through its Travel Agent Booking System while financial incentives are available for frequent flyers. “We believe there is increasing pressure on companies to maximise their travel budget,” added Hobday. Report by Steve Jones