Posts Tagged ‘ny times article’
Business Travel is up with the Airlines and Business Aviation:
News of the past two weeks indicates some signs of recovery in travel overall and maybe even the beginning of a recovery in the business aviation sector of travel.
But, is it a real recovery across the entire industry?
USA Today reports that business travel is up, and surveys of travel executives indicates that their company’s people will travel more in 2011. Even though travel will be up there is a new mindset that is more frugal about how travel dollar are spent.
Excerpts from the USA Today article:
The economic downturn has left its mark. The ACTE survey finds that 54.1% of corporate travel executives in the U.S. are “encouraging or mandating” alternatives to travel, such as videoconferencing. And a survey by Egencia finds that 56% of North American travel managers say they increased advanced-ticket bookings in the last year to keep expenses in check.
“In general, travel managers and purchasers have decided this new frugality is working well, and it’s allowing them to do a lot with a limited travel budget, and they’re sticking with it,” says Noah Tratt, vice president, supplier relations for Egencia Americas.
That can mean squeezing two or three clients into a trip. Corporate fliers are more likely to be sitting in coach when criss-crossing the U.S., though they might be able to book business class for flights overseas. And business travelers may be asked to use the frequent-flier points they’ve accrued on business trips if they want to upgrade to a premium section.
A NY Times article reports that Gulfstream orders in the 3rd quarter were the best since 2008 and deliveries are up over last year. The catch here is that the majority of Gulfstream aircraft now are being sold outside the US.
The good news is that people still need to travel to grow business. Video conferencing has not yet totally replaced the face to face meeting.
The bad news is that Cessna laid off another 700 employees in September and slowed production so the recovery is not across the board here in the US. Used aircraft prices are still depressed indicating a lack of demand. The manufacturers think, or hope, this will change in 2012.
It seems to me that the US Business Aviation market is going to be stuck in a no growth mode for 2011 with maybe some recovery in 2012, barring a major economic game changing event.
Where the growth seems to be is in Asia, India and Latin America. There is great opportunity in China where there are only about 1000 GA aircraft in the country of 1.4 billion people compared to 200,000 GA aircraft here in the US.
Has the US Business Aviation market reached maturity in its life cycle?
If so, then we must find ways to reinvent the business if we want growth. Or move to China.
Do you have to incentivize your employees to travel?
If you do then something is wrong with the airline system or your employees.
I will vote for a broken airline system.
Thinking about a recent NY Times article by Lisa Galst entitled “Rewarded for Flying Coach” makes me smile as I write this.
What is the world coming to when you have to pay your employees extra for the misery of riding in the back of the aircraft in the cheap seats as opposed to booking the more comfy seats up front? Sounds like hazardous duty pay to me.
I have never heard any of our clients having to incentivize their employees to take a flight on a private aircraft. In fact it is sometimes the other way around. Last week when talking to one of our good clients he was telling me that he uses the flights he books to see his clients as a morale booster for his employees. Those who travel with him are excited about the experience and when they get back to the office everyone else hears about how cool it was.
With all that is happening in the airline industry:
- reduced capacity resulting in high load factors which equals crowded airplanes
- oversold flights and increases in denied boarding
- cancellations due to the new tarmac rules
- a la carte fees for everything the ticket no longer buys you
Is it any surprise that people just don’t want to do this anymore?
And the federal government has the idea that they can step in and solve the problem with legislation to make it against the law to provide bad service.
Private aviation and business aviation are sitting on a gold mine of opportunity.
What if these companies took the money they are spending to incentivize their employees to fly coach and used it to fly more in private aircraft? They would get happier employees and gain a lot of productivity by not sending them through a hub that is cheaper to save a buck. Besides, with business aviation there is no such thing as routing through a hub. Its all point to point.