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The Honolulu Advertiser
Posted on: Saturday, July 21, 2001

National business
Executive travelers lose perks to cut cost

Bloomberg News Service

SINGAPORE — Until early this year, executives of Compaq Computer Corp. jetting across Asia could at least look forward to business-class comfort.

No longer. Under pressure to curb costs as global electronics demand sags, the biggest personal computer maker now orders staff in Asia to fly only economy class within the region, said Tommy Chan, Compaq's Singapore director of communications.

"We are tightening as much as we can," Chan said. "If there's any trip going, it requires more scrutiny," with most trips now needing vice president-level approval.

Sony Corp. and ST Assembly Test Services Ltd. are also trimming expenses to shore up earnings as growth slows in Asia and elsewhere. For airlines, that means leaving more of their most profitable seats empty or slashing fares, more bad news as many carriers in the region face falling profit.

While Cathay Pacific Airways Ltd. and Singapore Airlines Ltd. are still filling as many as three-quarters of their seats, they won't say how many of their business-class seats are empty.

In the United States, American Airlines and United Airlines blamed falling business travel for second-quarter losses. American carriers generate as much as 70 percent of their profit from such customers.

At Houston-based Compaq, which is cutting its work force by 12 percent this year, the tighter budget means executives in Singapore are flying economy class to such places as Sydney, Australia and Seoul, South Korea.

"We're attracting fewer business travelers this year," said Kang Myung Hee, ticket reservations manager at Global Travel Agency in South Korea. "Many companies have downgraded seat classes to economy."

Where companies are still buying business- or first-class fares, they are more likely to demand bigger discounts, travel agents say.