Ascend conducted a survey of corporate travellers, finding 49% of respondents expect to fly more for business in 2011, resulting in an estimated 5.5% increase in business travel (Reuters, 11-Mar-2011). Some 48% of respondents expect higher corporate travel budgets, while only 8% expect lower travel budgets.
Ascend survey finds business travel likely to increase in 2011
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LATAM and GOL: Excess capacity could threaten arrival of crucial recovery in Brazil domestic market
After two years of weak demand and pricing, some signs of stabilisation are emerging in Brazil; however the country’s two largest airlines are adopting an understandably cautious tone in their assessment of the operating environment. Although both LATAM Airlines Brazil and Gol have significantly reduced their domestic capacity during the last year and a half, both airlines have concluded that some excess supply remains in the market place. Fast-growing Azul has opted to slow its capacity growth in 2016, but Brazil’s fourth largest airline Avianca Brazil has continued growth in order to build its market share within the country.
LATAM Airlines Brazil also believes its performance on routes between the US and Brazil is improving, which is a similar conclusion drawn by US airlines operating between the two countries. For LATAM, the improved performance is offsetting some weakness on other long haul routes from its Spanish-speaking countries.
Neither airline has offered specific capacity guidance for 2017, but LATAM Airlines Brazil and Gol are likely to keep their supply restraint intact. Pricing in the domestic market has yet to stabilise, and competitive capacity actions will result in those airlines keeping their own ASK increases at bay in order to sustain a favourable supply/demand balance.
Disruption hits Asian business and corporate travel as LCCs and mobile use become ubiquitous
Corporate travel disruption, evidenced by the spread of mobile apps and use of the sharing economy, is not only impacting on travel managers in the west but it is increasingly being felt in Asia.
A recent McKinsey report on Asian Business Travellers warns that corporate travel in the region is primed for disruption by the same forces as at play in the leisure market.
Asia has long lagged markets like Australia in the adoption of online booking, much to the chagrin of travel managers keen to implement technology as part of their travel policies. However it appears that this obstacle is being overcome, with digital booking channels now more popular than ‘traditional’ channels – such as calling the travel agent, or booking via a secretary.
McKinsey also reports that travel managers are bracing for a wave of demand for mobile booking for business travel – with Asia on the same path as more mature corporate travel markets.