Farewell, reclining seats

In the heady days of corporate travel, employees who had to take long flights could get their employers to spring for more comfortable business-class seats.

They're expensive, but companies figured it was better than losing a big contract or hurting a relationship — because their employees weren't attentive after a restless flight squished in coach.

Point of no return

But now, with perhaps the worst downturn since the Great Depression, companies are curtailing or eliminating business-class travel altogether, sending employees from the front of the cabin to the back of the aircraft. According to some travel experts, there's no going back.

“We're looking at a permanent makeover,'' said Joe Brancatelli, the editor of business travel website Joesentme.com.

He contends that each recent recession has changed the nature of business travel for the worse. With fewer companies willing to pay higher business-class fares, airlines are reconfiguring their aircraft to have fewer premium seats, slashing flights and operating fewer non-stop flights.

“When the economy turned up, fewer business travellers were still standing, fewer airlines were still flying and the whole experience of living life on the road was harder, nastier, less fulfilling and more expensive,'' Brancatelli said.

“I don't think this recession will be much different.''

Falling demand is opening up business-class seats that are cheaper than they have been in a while.

In March, the number of international first- and business-class passengers fell by nearly 20 per cent, continuing a spiral that began early last year, according to the International Air Transport Association.

“We have not yet reached a floor to the fall in air travel,'' said Seven Lott, spokesperson for the airline trade group.

Revenue from premium fares slid even more — down 35-40 per cent — as airlines offered deep discounts to fill seats that otherwise would have remained empty.

As a result, some business-class fares have slumped 70 per cent and, in some cases, the fares match walk-up, fully refundable coach fares. It's allowing some employees to stay in the front of the cabin.

Even when corporate policy restricts it, some employees are booking “Y'' class coach fares — the fully refundable and fully changeable tickets — and getting upgraded to business class.

Fall in the first quarter

Hotel rates and air fares to top business markets in the US and Europe continued to fall in the first quarter, by as much as 15 per cent over a year earlier, according to a survey by Expedia Inc's Egencia travel management unit.

“As companies tighten control over travel spending, the decrease in demand has resulted in significant year-on-year declines in average daily rates and average ticket prices for most business markets,'' said Rob Greybar, president of Egencia.

The biggest drop was in New York, where hotel rates fell by 20 per cent in the first quarter compared with a year earlier and air fares to the city slid 15 per cent.

Oddly, it was cheaper to fly to Washington with fares down 8 per cent, although it was more expensive to stay there — up 8 per cent.

One explanation is the presidential inauguration in January, which doubled the room rates at many hotels.

“While capacity is still down year on year, we have seen some recent movement from the airlines to add capacity back in the summer months,'' Greybar said. “This could provide the buffer we need for a further drop'' in corporate air fares.