Asian businesses should review their business travel behaviour and
implement cost-saving strategies to overcome the region's rising
airfares, according to a new study by FCm Travel Solutions.
Asia's thriving economies have helped spur demand for intra-regional
and international air travel, and driven positive changes for the
travel industry in recent years. But one result has been rising flight
prices. Identifying non-essential travel and opting for more
economical flights are two of the suggested measures for maintaining
or reducing corporate travel budgets as ticket prices continue to
climb.
"The evolution of our industry has been exciting, but the downside for
companies and their travellers is a higher price for air travel," says
Joseph Kao, Director of FCm Travel Solutions Asia. He adds that
intra-Asia business travel, along with rising fuel costs, wide-scale
purchasing of new aircraft, and a shift towards a commission-free
travel industry environment have all influenced airlines to increase
their fares.
Meanwhile, the arrival - and fast growth - of new low-cost carriers
has created price wars, including penalties and fare restrictions, on
competitive routes. And on government-controlled routes the number of
carriers has been limited, thereby reducing competition and increasing
fares.
There are a number of strategies to help companies combat these
increases and help prevent travel spend from spiralling out of
control, Kao says. "The first step is to carefully consider whether
all business travel is absolutely needed. Businesses can save up 10 to
60 per cent on their total air spend by replacing non-essential travel
with video or teleconferencing. And this pays dividends to the
environment as well."
For all business travel that is deemed essential, fares should be
booked as early as possible. This not only guarantees the traveller a
seat, but can save up to 15 per cent on the company's air travel, Kao
says. Reconsidering the class of air travel is another cost-saving
strategy. "Companies need to assess whether their people really need
to travel business class, particularly on short-haul and domestic
trips. If the journey is not long-haul, premium economy can offer a
great alternative at 25 to 50 per cent less than a business class
fare.
Corporate culture can be a critical factor in achieving cost
reductions. "In many companies, it often takes some simple changes to
the way they book their travel, and their attitudes towards business
travel," Kao says. "It's extremely important that company travellers
and bookers are educated on the need for change, that their managers
lead by example, and that a central travel policy is in place to
support a consistent approach company-wide."
Last update : Saturday, 22 September 2007
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