UBS analysts recently polled 121 corporate travel managers
and found evidence suggesting "a continuation of the current strong
business travel environment," despite rising fares and growing frustration
with ancillary fees. In a report issued Tuesday, UBS analysts also noted that
United Airlines, Delta Air Lines and Southwest Airlines have secured more
business among survey respondents while American Airlines and US Airways have
lost some.
When asked about year-to-date corporate air travel costs
versus the same period in 2010, 20 percent of respondents indicated their
organizations in 2011 have increased spending by at least 20 percent. Another
23 percent said spending is up between 11 percent and 20 percent. Thirty-one
percent said spending is up, but more modestly. About 16 percent indicated
their organizations have spent less this year, with the rest of respondents
saying spending levels were unchanged.
Looking forward to the remainder of 2011, results were
similar with 16 percent expecting corporate air travel spending to increase by
at least 20 percent. About a quarter of respondents anticipated spending levels
of between 11 percent and 20 percent above 2010 levels. UBS concluded that
"corporate travel managers do not expect their air travel spend to
decelerate."
Meanwhile, "nearly three-quarters of survey respondents
indicated that higher air fares are having no effect on their travel
volumes," according to the UBS report.
Two-thirds of those polled said their organizations' travel
policies have not changed from last year, with many more of the remainder
indicating more restrictive policies (28 percent of all respondents) than those
indicating less restrictive policies (6 percent).
Similarly, when asked if their firms within the past six
months established policies to restrict spending on such ancillary services as
checked baggage, inflight Wi-Fi and preferred seating, nearly eight in 10
respondents said they had not. "However," UBS analysts wrote,
"there is a good deal of frustration regarding the inability to track
spend on ancillary services. This seems of more interest to corporations than
direct-connect distribution methods."
UBS also sought to understand organizations' use of specific
airlines, "given the changing dynamics in the airline sector resulting
from M&A and a bigger push by low-cost carriers to grab corporate
business." According to the results, "United, Delta and Southwest
were identified as the airlines gaining the most market share. Both American
and US Airways were listed as losing share." UBS suggested those results
are "consistent with the network developments over the last few years, but
we've yet to see this impact in our corporate revenue data."
More than half of the survey respondents represented
organizations with annual air spending below $25 million.
Source: The Beat