German Corporate Travelers Lengthen Advance Air Bookings

German corporate travelers are booking flights further in advance of departure to take advantage of cheaper fares, especially in business class, according to figures from AirPlus International.

Third-quarter statistics from AirPlus also show a major rise in booking volumes despite the worldwide economic downturn. Global transactions rose 5 percent from the same quarter in 2007. AirPlus believes there is a direct connection between the two sets of figures, with German companies attempting to fly not less but smarter.

Among the company's large clients, which it defines as those spending more than €10 million annually on air, the average number of days flights were booked in advance of departure rose from 12 in 3Q07 to 13 in 3Q08. The increase was even greater for midsize clients with €1 million to €10 million in air spending, up from 14.75 days to 16.25 days.

The lengthening of booking periods was more pronounced in business class than in economy. For large companies, the number of days in advance of departure for economy extended from 13.63 to 14.4, while in business class it grew from 5 to 7.5. Advance booking in economy for medium clients went up from 16 to 17 days, while in business class it lengthened significantly from 6.88 days to 9.96 days.

"German companies see global recession knocking on the door and fear they may lose orders if they reduce their travel," said Michael Fuerer, AirPlus director of sales for Germany. AirPlus claims 20,000 corporate clients in Germany and handles 15 million flight coupons in the country annually. "Since they cannot cut travel, they are booking smarter instead, especially in business class, where a lower fare can make a much bigger price difference."

Traditionally, lower fares for advance purchase have been associated with economy class because budget airlines introduced the model of selling buckets of seats that progressively become more expensive. However, AirPlus said discounted but restricted business class fares have become much more common in the German market over the past year. In many cases, those restrictions include an advanced booking condition.

AirPlus said those special business class fares especially are used by smaller companies unable to gain discounts through negotiated airline agreements.

Germany is by no means the only European country where corporate buyers are encouraging travelers to book earlier. In a roundtable interview of European travel managers to be published by BTN next month, Bernadette Basterfield, U.K.-based international head of travel for JPMorgan Chase Bank, said her company is actively communicating the benefits of advanced purchasing. Another company told BTN it is aiming to double the number of bookings made at least 14 days in advance and telling its travelers across Europe they can save the business hundreds of thousands of dollars if they do.

Meanwhile, third-quarter booking figures from AirPlus show significant variations in growth, with two countries hit hard by the banking crisis faring particularly poorly. Bookings by German travelers to the United States rose only 1.1 percent compared with 3Q07, following 19 percent growth in the previous three years. Bookings to the rest of Europe grew 2.4 percent, but to the United Kingdom they fell 2.7 percent.

Bookings to all other regions of the world were up by double-digit percentages: Eleven percent to the former Soviet Union, 14 percent to Asia, 21 percent to Africa, 24 percent to Latin America and 27 percent to the Middle East.

Another example of smarter booking to emerge from the AirPlus database is a decline in cancellations. In larger companies, the percentage of tickets that were cancelled fell from 4.67 percent in 3Q07 to 4.49 percent in 3Q08. Among medium companies, cancellations dropped from 3.84 percent to 3.58 percent. AirPlus attributes the decline to tougher policy enforcement and more careful planning by travelers.