Early this year, when Indian companies felt the tremors of the global economic meltdown and embarked on a cost-cutting drive, business travel by air was one of the first few expenses to be struck off the list. This had badly hit Anoop Kanuga, who owns a travel firm in Mumbai. His airline ticket bookings for business clients plunged to new lows.
The downward trend in domestic business travel continued for most of last year and the first half of 2009. However, over the last one month, Kanuga has witnessed a gradual pick-up in corporate spend on air travel.
“Most of them (corporate customers) had slashed their travel budgets by more than 70%. With a smaller budget, executives were either video conferencing or travelling by trains and buses. That is changing now. We see them booking more airlines tickets,” he said.
Kanuga says there has also been an increase in the number of professionals such as doctors and lawyers boarding aircraft. Kanuga’s travel agency Bathija Travels has seen corporate bookings go up 15% in September and October compared with earlier months of this year.
Ankur Bhatia, managing director of Amadeus, a company that provides technology and distribution solutions to travel companies, confirmed the trend. He said growth in business air travel mirrored the overall growth in air passenger traffic in the domestic market.
“There is no separate data on air business travel but we know that it (business travel) has gone up along with leisure travel in the domestic sector,” he said. A Kingfisher Airlines spokesperson said, in contrast to a few months back, his airline was registering around 80-90% occupancy in the business class during peak hours on metro routes.
Load factors on business and first class had dipped to less than 50% during the peak of downturn in the airline
industry. “What I have gathered from airport managers is that business class is going packed during peaks hours on metro routes. Even first class lounges at the airport are being utilised more, as travellers are upgrading their air travel,” he said.
The upward swing in business air traffic in the domestic market is in contrast with the trend in international market. The latest data put out by the International Air Transport Association shows that international premium travel was down 13.9% in September compared with the same month last year, a deterioration from the 12% August fall. International economy travel in the same month was up 1.2% compared with a 0.4% decline in August.
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