London - Air travel spend by existing
AirPlus International customers in 2014 fell 3.6 percent globally year over
year, managing director and chairman Patrick Diemer disclosed at a media
briefing here last week. The company's global business travel volume grew 7.5
percent year over year, thanks to an increase of 1,100 customers to 43,000 and 21
million transactions to 143 million. However, it would appear that each customer
on average is spending less, despite suggestions made in some quarters that
companies are beginning to loosen restrictions on travel.
AirPlus UK managing director Caroline Haywood
said smaller clients are relaxing those restrictions. "Larger corporates
are taking longer to get back to pre-recession behavior, and there is a lot of
discussion about whether they will ever get back to it," she said, adding
that a few of AirPlus UK's largest customers have only recently started to drive
tighter controls on travel expenditures. The U.K. operation replicated AirPlus'
global trend. Centrally billed Company Account volumes rose 7.5 percent in 2014,
and corporate card volumes rose 23.8 percent. Yet the number of flights booked
by existing clients fell 9.5 percent and the average ticket price booked dipped
1.6 percent.
Globally, 2014 issuing volume increased to
€12.7 billion from €11.8 billion in 2013, and revenues, stated as a private
entity, climbed to €320 million from €298 million. Pre-tax profits more than doubled
to €40.4 million from €19.5 million. The profit improvement can be attributed
in part to the increase in new business, but results in 2013 were hit by
exceptional items. The current year has started well, with issuing volume for
January and February 5.1 percent higher than during the same period in 2014.
China continues to be AirPlus' number-one
growth market, which more or less has been the case since the company launched there
in 2008. In 2014, China accounted for one-quarter of growth across the entire
AirPlus business. Regulatory challenges make it difficult for other issuers
(because they are banks) to offer corporate payment products in China, and thus
AirPlus has achieved a 92.3 percent market share of China's billing and settlement
plan card settlements in 2013. AirPlus in 2014 also launched a partnership with
Chinese online travel giant Ctrip.
Elsewhere, the fastest-growing product for
AirPlus, as it is for almost all corporate payment players, is virtual payment.
Haywood said virtual cards accounted for 20 percent of AirPlus issuing volume in
the United Kingdom in 2014. A virtual card number normally is used for only a
single transaction, but AirPlus has launched a new version of its A.I.D.A. virtual
product called A.I.D.A. Flex, in which the same number is applied to a tightly specified
cluster of purchases or bookings. "It can be used for recurring payments,"
said Haywood. "There is less admin because you set it up once at the beginning
of the year."