Businesses continue to skimp on travel

By Brad Foss
Associated Press

NEW YORK — Large companies spent 16.5 percent less on airline tickets in 2001, compared with a year earlier, a survey of corporate spending on air travel found, and more than half of the respondents plan to reduce spending even further in 2002.

The annual survey, conducted by the Business Travel Coalition, analyzed data provided by 184 corporations and organizations that spent a combined $2.9 billion on air travel in 2001.

While corporate travel budgets typically expand and contract along with the economy, nearly three-quarters of the companies said at least some of the cuts they made in air travel over the past year would be permanent, according to the recently released survey.

The companies said the cutbacks were most influenced by the high cost of airline tickets, the need to reduce expenses during the economic slowdown and the hassles of airport delays. Heightened airport security following the Sept. 11 attacks also has made business travelers more likely to travel by car for shorter trips.

Spending cuts by business travelers has dramatically affected the airline industry, which posted $2.4 billion in losses during the first three months of 2001. The quarterly losses were also blamed on the lingering impact of Sept. 11.

Eighty-six percent of the companies surveyed said they would rely more heavily on video conferencing as a high-tech alternative to air travel. Nearly three-quarters of survey participants also said they relied more heavily on airlines that traditionally offer lower fares.

The average expenditure by a business traveler on a one-way domestic flight was $362 in 2001, compared with $372 the year before, the survey found.

When asked what it would take to increase flying in 2002, the companies cited lower fares, an economic rebound and faster airport check-ins. Thirty-eight percent of the respondents said they would spend more if the airfare structure were easier to understand.

The Business Travel Coalition of Radnor, Pa., conducted the study in collaboration with Unisys Corp. between March 20 and April 12. Companies that were surveyed had an average annual air travel budget of nearly $16 million.