BA expects five years for business travel recovery

14th Jul 2009

British Airways’ premium market could take at least five years to recover, according to the airline’s head of American operations.

Premium rate passengers have traditionally been BA’s main cash cow but with almost 70 percent of business cutting travel budgets, airlines must work out how to win back the business, says Simon Talling-Smith, executive vice president for BA in the Americas.

“BA’s view is that it will take quite a long time, potentially more than five years, before the full value of the business market returns,” he told The Times.

“Right now [businesses] are putting more people into economy class. Our business and first class business volumes have fallen by around 15 per cent, but economy volumes have fallen by about 1 per cent [for the six months to June 2009]. One could reasonably guess that a certain number of business class customers are down trading to economy.”

He also admitted that even in a recovery, the days of charging executive travellers £4,000 for a return transatlantic ticket could be some way ahead. “The big question is, will people be prepared to pay the same prices? One has to reasonably assume that they won’t,” he added.


The airline has recently run a series of special offers with prices as low as £1,100 and two for one offers allowing some business travellers to fly for free.

A top priority for BA now was to persuade corporations that cutting back on executive travel could be bad for business, Talling-Smith said.

The company has commissioned a travel survey from the Harvard Business Review, among 2,100 business customers. More than two thirds [69 percent] reported a reduction in their travel budgets, 87 percent considered face-to-face meetings as essential for closing deals, and 95 percent agreed that meetings were key to building long-term business relationships.

But the survey, commissioned to coincide with its AGM, also found that 48 percent are managing pretty well on reduced travel budgets.


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