Businesses put a check on baggage charges

25 July 2012

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25 July 2012 | Adam Leach

A survey has shown that fewer businesses are now paying for employees to check in their luggage on flights.

The GetThere Corporate Travel Benchmarking Survey, published yesterday, found 78 per cent of companies pay for one bag of luggage to be checked in, a drop of 17 per cent compared to the 95 per cent of businesses that would pay the charges in 2010.

But Suzanne Neufang, general manager at GetThere suggested this may be because companies have negotiated away the extra fees. “Many corporations are likely negotiating away some of the ancillary fees charged by airlines and establishing firm travel policies around what they will and will not pay for,” she said.

The survey also pointed to companies driving down costs in a number of other areas. The research, based on data provided by 40 companies, found while spend on baggage and food and drinks - which dropped by 11 per cent to 42 per cent of companies - reduced significantly, companies were still prepared to pay for wi-fi connections, which fell by just one per cent.

The study also found air ticket prices increased by five per cent and hotel rates by four per cent over the course of the year. But car rental costs had reduced by one per cent.

To deal with higher costs, just under half of companies are using technology. The survey found 40 per cent already use virtual meetings as part of their travel policy, with a further 19 per cent planning to adopt it in the next 12 months.

Meanwhile, a separate report compiled by IdeaWorksCompany and Amadeus found in the past year the amount of reported revenue taken by airlines from ancillary fees has risen from €15.11 billion (£11.33 billion) in 2010 to €18.23 billion (£14.27 billion).

While the rise is skewed by the fact the number of airlines reporting ancillary revenues increased from 47 to 50, the report showed revenues from individual companies are also increasing. United Continental, which made the most in both years, saw an increase from €3.5 billion (£2.7 billion) to €4.1 billion (£3.2 billion) while easyJet reported a rise from €655 million (£513 million) to €890 million (£697 million).

Holger Taubmann, senior vice president for distribution at Amadeus, said: "We've seen the industry move swiftly to grasp some clear opportunities for providing ancillary services, such as baggage fees, extra legroom and on-board catering.

 


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