Firms give flights the miss, go for telepresence

As soaring fuel costs make travel dearer, options such as video conferencing gain traction

MUMBAI/ BANGALORE: Employees at two of Wipro Technologies’ centres in Bangalore can now communicate with their colleagues in one of the US centres on the video screen, obviating the need to travel the distance in connection with official work.

The country’s third-largest IT company has installed what is known as telepresence technology, from networking major Cisco, at these three centres.

According to Sudip Nandy, president — technology, media & telecom (TMT), Wipro Technologies, the technology saves both time and money by cutting business travel costs.

Soaring jet fuel prices have pushed up airfares in recent months, forcing a reduction in the number of people taking to the skies. Corporates are increasingly economising on travel and asking employees to bunch up meetings, etc in a bid to keep a leash on costs.
Wipro isn’t alone in looking for alternatives to air travel.

Says Alok Kejriwal, founder and chairman, Contests2Win, “In the last three years, it had almost become a habit to tell our business partners that we’ll just take the next flight and come over for a meeting. That is not really the case anymore.”

Needless to say, even Kejriwal is relying on technology to prune travel costs. “Earlier we used to fly in people for interviews. Not anymore. We use a lot more of video conferencing now,” he says.

Dinesh Sehgal, regional director of Tandberg India, which provides video conferencing solutions, says the segment is growing at over 25% a year. He is confident that any cutback in corporate spending on travel will only hasten the adoption of video conferencing.

This bodes ill for domestic corporate air travel though.  Ajay Prakash, a travel agent and the national general secretary of the Travel Agents Federation of India (Tafi), says, “There has been a 10-15% drop in corporate movements. If fares go up anymore, and with inflation the way it is, corporate travel will take further hit.”

The dip in business air travel is particularly sharp on the shorter routes, such as Bangalore-Chennai, Delhi-Jaipur and Mumbai-Pune. In such cases, the business travellers are shifting to rail or road.

Suresh J, chief executive officer, Arvind Brands, says, “While we always look at cutting costs, for routes like Chennai-Bangalore, it might be cheaper to travel by road.”
Sunil Bijlani, CEO of travel agency Business and Pleasure Travel World echoes the view: “It is for destinations like Goa (from Mumbai), which is an overnight train journey, that there would be a shift.”

This has led to a decline in the passenger load factor on short-haul routes over the last few quarters, forcing many airlines to withdraw flights.

However, Parthasarthy Basu, chief financial officer, SpiceJet Ltd begs to differ. He feels the softening in air travel is more pronounced in the leisure segment.

“Even though the overall air travel has come down, we have seen our percentage of corporate travellers increase from around 40% a few months back to 49% this month,” says Basu.

His argument? Companies may have cut down on discretionary air travel, but there is no beating down essential travel.

An analyst backs Basu’s claim of a growth in business travel. According to him, it is the leisure travel segment that has shrunk dramatically.

In June, the total number of passengers carried by domestic carriers tumbled 3.9% year-on-year to 35.06 lakh.

An industry expert marks out yet another trend - that of travellers shifting from full service carriers to budget airlines as ticket costs soar. “Where the timing suits them, many company executives who were earlier travelling by Jet Airways and Kingfisher Airlines are opting for JetLite, SpiceJet, IndiGo and other budget carriers.”

Be that as it may, for now. Virtual reality is certain to hit more corporate tabletops should oil prices hold firm much longer hereon.

p_sharma@dnaindia.net, n_john@dnaindia.net