Use of nonrefundable fares by corporations on the rise

The Business Travel Coalitions 2004 U.S. Business Travel Survey confirmed two widely reported trends: the increased use of low-cost carriers and nonrefundable tickets.

In the survey of 112 corporations, 69.7% of respondents said they plan to increase use of low-cost carriers in 2005. And, the companies that responded that they plan to increase their use of airlines like Southwest, JetBlue, AirTran, Ted, Song and ATA in 2005 indicated that they anticipate increasing ticket purchases on these carriers 10.2% on average.

Poll participants stated that 68.5% of their domestic -- defined as the U.S., Mexico and Canada -- air purchases through June were for nonrefundable tickets. That figure has climbed steadily since 2000, when it was 50.6%.

Corporations estimated that their 2004 spending on air transportation would reach $1.09 billion, up from $1.05 billion in 2003. (Participation in the BTC poll grew from 110 firms in 2003 to 112 in 2004.)

The average fare these corporations spent for a domestic one-way ticket was $268.14 through June. Thats down 28% since 2000, when the average domestic one-way fare, according to BTC survey respondents, was $372.37.

There was no change in sentiment from the 2003 survey to the 2004 poll regarding the permanent nature of cutbacks in business travel. Ninety-four percent of respondents in each survey said smaller business-travel budgets are a permanent phenomenon.

Two-thirds of respondents noted that they plan to increase their use of Web conferencing, video conferencing or teleconferencing in 2005 as a substitute for air travel or as a productivity enhancement.

The survey also found that the use of online self-booking tools for air reservations increased from 28% in 2003 to 34% through June 2004.

The BTC conducted the survey Sept. 10 to 26 and Oct. 13 to 19.


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