More than half of 109 corporate travel managers responding
to a UBS poll indicated that their organizations "had either recently
taken some action to reduce spend or planned to do so by year-end,"
according to a research note issued Tuesday by UBS analysts. But half of those,
according to survey results, "still anticipate air travel spend growing
year over year in the balance of 2011."
Overall, two-thirds of survey respondents—representing
various industries and corporate travel volumes—anticipated growing air spend
during the remainder of 2011, down from 80 percent indicating such in a similar May 2011 survey administered by UBS.
The size of the expected increases also suggested "some
deceleration" in corporate demand for the rest of this year. Across the
survey base, 25 percent expected an increase of 1 percent to 5 percent in their
firms' corporate air spending for the balance of 2011, compared with a year
earlier. Another 17 percent estimated a 6 percent to 10 percent increase, 15
percent predicted 11 percent to 20 percent and 9 percent projected an increase
of 20 percent or more.
The remaining 34 percent indicated they expected "flat
to declining spend versus 20 percent in our prior survey," UBS reported.
The two surveys found "roughly equivalent"
responses regarding observed corporate air spending year to date, with 77
percent reporting growth in the more recent survey versus 74 percent from the
May survey.
"We believe U.S. airline stocks are currently priced
based on an expectation for a sharp fall in travel demand," according to
UBS analysts. "Our forward bookings data, which provides a near-term
snapshot of revenue trends, actually shows a strengthening average fare
environment (thanks to capacity cuts). This survey, which provides a somewhat
longer-term outlook, is less bullish but does not indicate a pending collapse
in corporate travel spend. Taken together, we remain positive on the
group" of U.S. airlines.
Source: The Beat