Low-cost airlines on top in flight fight

16 October 2002
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17 October 2002 | Robin Parker

Travel buyers are ditching long-term deals in favour of cheap tickets from low-cost airlines, according to the latest research.

They are going for more "spot" buying based on one-off prices from airlines such as easyjet and Ryanair, American Express says in its latest Global Travel Trends survey.

Budget airlines have a 20 per cent market share in the UK, and 15 per cent in the US, the study found. Business flyers now make up half of easyjet's revenues.

The findings confirm signs that companies are increasingly willing to use low-cost airlines for business travel.

Airlines including British Airways and KLM have reacted by revising their fare structures and now offer discounts of up to 40 per cent on non-refundable advance purchases.

Matthew Davis, director of global consulting services at American Express, said: "Corporations are noticing that it can be cheaper to use the lowest logical fare approach to purchasing air tickets rather than relying on their preferred suppliers' negotiated rates."

But Ian Nurdin, business travel manager at Nestlé UK and London regional chairman of the Institute of Travel Management, said such thinking ignored the need to forge strong links with long-term suppliers.

"Business travel relies on good relationships with suppliers, helping them to be flexible and encouraging loyalty. Low costs still depend on early negotiations as they are rarely available at the last minute on the major airlines."

SMoct2002

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