U.S. Companies Stay Grounded

In response to the Sept. 11 attacks on the United States, in which the very instruments of business travel were turned into weapons, U.S. corporations en masse told travelers to take only mission-critical trips. Apprehensive travelers welcomed the edicts.

In the painful moments after the travel industry witnessed the demise of many of its own, travel management companies quickly tracked down clients and accommodated thousands of stranded travelers. Afterward, the vast majority of buyers turned to setting an "until further notice" policy that ranged from evaluating each travel request case by case to temporarily banning air travel altogether.

But companies are not overreacting, according to dozens of corporate travel buyers interviewed last week by Business Travel News. Still a critical business tool, travel will continue to be driven by business needs; many companies already had reduced drastically their travel spending before the crisis.

As New York limped back to business last week, so too did the corporate travel industry. At Wilmington, Del.-based DuPont de Nemours & Co., for example, a ban on travel was lifted within a few days of the attacks and employees have been making reservations. Fidelity in Boston recommended that employees do not use airlines for travel only through the middle of that tragic week.

Nonetheless, jitters remain.

Minneapolis-based Cargill Inc. required travelers to get senior-level approval for "necessary" travel in the days following the incidents. "The airlines are telling us it's even safer now than ever," said Lisa Trenda, Cargill travel manager. "Sure, we can say that, but the reality is that people are scared."

According to Kevin Iwamoto, president of the National Business Travel Association, "There's a lot of uncertainty, but those feelings are normal and we, as travel managers, have to be sensitive to that."

Buyers told Business Travel News that reports by the general press attributing low airline loads to a "fear of flying" evidenced by cautious corporate travel policies are misleading.

"It's not a fear of flying but more of an apprehension hanging over this whole thing—less a safety issue than a matter of dealing with the memory of what happened," said Mark Vilcsek, senior purchasing manager of travel services at Sunnyvale, Calif.-based National Semiconductor. "It's also the instability of the infrastructure right now and, although it is beginning to settle out in terms of security procedures, there is concern about reprisals to what the United States might do. We just want to be sure there is no vulnerability."

Interviewed during her last week at DuPont, retiring manager of business travel services Joyce Bembry said the "fear" angle sends the wrong message. "It's not entirely a fear of flying," she said. "It also has to do with the economic times combined with what has occurred. Our edict was already there: Do not travel unless it will bring in business."

Of concern is the extent to which new security policies, both the temporary ones now in place and permanent fixes the industry and government will determine (see story, page 1), will diminish the value of business travel. According to polls and buyer statements, both travelers and companies overwhelmingly support additional security measures, even if it means more inconvenience or cost. Taking that inconvenience into account, then, frequent flyers likely will be more inclined to combine trips and corporations will add support for such alternatives as videoconferencing.

"I would imagine that for some of our short-haul trips, where people fly 200 to 300 miles, they may look at that and ask if it's worth being at the airport two hours ahead," said Michael Hall, corporate travel manager at Johnson Controls in Milwaukee. "But air travel is obviously safer today than it was last week, and I'm not going to tell someone to drive—it's less safe that way." Other buyers expressed the same concern about driving as an alternative.

Meanwhile, corporate travel managers are attempting to help employees determine what exactly is "essential," "necessary" or "critical" travel.

For Black & Decker in Towson, Md., director of travel and meeting services Pete Buchheit said his company's temporary policy of "only absolutely essential air travel permitted for U.S.-based travelers" was intended "to give those concerned about it an out so they don't get into a snit with their supervisors. Nobody should feel they have to travel."

At Ford Motor Co. in Detroit, director of global travel and events Bob Magnus is trying to help employees interpret the "critical needs" that must now be in place for them to be allowed to fly. "Some travelers want someone to make up their minds for them," he said. "Everyone thinks their trip is important, so I've been asking, 'What would happen if you don't take that trip?' In some cases, someone locally can handle a job someone else thinks they have to travel to. So we're just taking a hard look at why."

That's something corporations everywhere already had been doing for months in response to the slipping economy. Ford's travel was down 26 percent year over year before the attacks, Black & Decker was off 36 percent, National Semiconductor was looking at a 30 percent to 40 percent drop and DuPont's Bembry said the company's pre-attack policy was the strictest she had seen in her six-year tenure.

Clearly, though, business travel took a hard hit from the tragic events of earlier this month. Michael Brooks, senior vice president of general services for Republic Mortgage Insurance Co. in Winston-Salem, N.C., offered a "wild guess" on the additional impact from the attacks of 20 percent.

"It will be interesting to find out how much our travel does go down, because we think we've been pretty good at holding spending," said George Odom, manager of travel services and corporate meeting services at Indianapolis-based Eli Lilly & Co.

"We do a good job of negotiating," Magnus said, "but when you eliminate the trip, that's huge dollars."

Still, business must go on.

"That's dictated by our customers," Hall said. "Most of our travel already is fairly essential. We're in a service business, built on face-to-face contact, and videoconferencing is not appealing. But if our customers' business has a downturn and so does ours, we'll have to travel less."

"At some point," Buchheit said, "corporations understand that without a viable air transportation system, we're out of business. It will be a balancing act and I think travel managers need to take a leadership role and see where that balance is."

"I think it's just a shock wave through the business community," Vilcsek said. "But, inevitably, air transportation is a must in this global economy. It will continue, albeit differently in terms of the freedoms we were accustomed to. So many business travelers were accustomed to arriving half an hour before departure, but I don't think that will ever be the case again."

Pfizer Inc. corporate travel manager Phil Dunphy echoed the collective feeling: While the terrorist attacks dealt a crippling blow to the industry, it was merely a blow to the industry as we once knew it; like the nation at large, corporate travel will endure.