JANE LEVERE NEW YORK
Prospects for recovery in air traffic in the USA remained uncertain more than a month after the September terrorist attacks, particularly in business travel.
According to Merrill Lynch airline analyst Michael Linenberg, lower-yield discretionary travel is rebounding more quickly than higher-yield business travel. "Discretionary travel appears to be coming back because of the massive amount of discounting," he said.
"With all the lay-offs, business travel is lagging," he added. "Historically, business travel lags by a quarter the return in corporate profits. Until we see corporate profits growing again, we will not see growth in corporate travel."
Forecasts for recovery vary widely. In a late-September poll of 113 corporate travel managers, American Express found that 65% had not made changes in their company travel policy in response to the terrorist attacks. Of the 35% that did, 52% restricted air travel and 39% asked employees to use alternative communications, like videoconferencing, to replace travel.
Meanwhile, the National Business Travel Association, representing more than 2,000 corporate travel managers, surveyed its members in late September and found that 70% expected a recovery in business travel within the next three to six months, 12% anticipated a recovery in nine months, and 18% said a recovery would not occur for at least 10 months.
Asked what would be required to lift travel restrictions imposed after 11 September, 46% of respondents said increased security would be the deciding factor, while 30% said would depend on the economic condition of their employer.
A more pessimistic forecast came from the Business Travel Coalition, a lobbying group that represents the business travel interests of companies like Daimler-Chrysler, Ford and Procter & Gamble. A survey of 137 corporate travel managers in late September found that "business travel levels for January 2002 are on track to be 50% less than January 2001".
Only 19% of managers polled predicted January 2002 business travel levels would be at or above the levels which were effective before the 11 September terrorist attacks.
Source: Airline Business
