Corporate Highfliers Take to Budget European Travel

Gone are the days when European budget airlines carried only the backpacking hordes that mainline operators squeeze into the tail end of the plane.

Business travelers are giving up lounges, cocktails and slippers for a cheaper ticket on short-haul work trips.

As business travel rises, so does the appeal of no-frills carriers — at least for bosses, if not for employees.

Over the past two years, the number of European business passengers on budget airlines almost doubled, according to a survey of 2,500 corporate card users released last week by Company Barclaycard.

The survey found that 53 percent of corporate travelers used a low-cost carrier at least once last year.

And with budget airlines increasing their flights across to European business destinations, discount players could snatch up even more of this lucrative segment of the airline market.

"The majority of business travelers believe business class on mainline airlines doesn't give value for money, so many are looking to the cheaper carriers," said Simon Chick, head of marketing for Company Barclaycard, a leading provider of Visa charge card services for business customers.

"This is across the board. It's driven by the desire to manage costs and is endemic of the rise of Internet bookings."

But while budget carriers are plundering the leisure business of their mainline rivals, it will be harder for them to be as popular in the corporate market, industry observers say.

Flying from airports that are further from city centers, issuing non-changeable tickets and offering no perks like frequent flyer benefits, budget carriers are less likely to be the airline of choice for a more seasoned business traveler.

"For the business traveler, there are many inefficiencies in using a low-cost airline," says Keith Tottem, spokesman for the Guild of Business Travel Agents.

"If you miss your flight, you could end up paying the same fare as a regular airline and still get no food or drink."

Small, Medium Firms Main Flyers

Company Barclaycard's findings are confirmed in the traffic figures of budget airlines that are populating European skies, offering only one class of service, making passengers pay for their meals and often not giving pre-assigned seats.

Over half the passengers on EasyJet, Europe's second largest budget airline, now travel for business compared with 40 percent at this time last year, says spokesman Toby Nicoll.

At Buzz, the low-cost airline of KLM Royal Dutch Airlines, 41 percent of passengers flew for work last year, while business travelers made up more than one-third of traffic at Go, the low-cost airline put up for sale by British Airways Plc.

Travel is not confined to the lower echelons of corporate life. Recent research at Buzz showed that 72 percent of their business travelers were at the managerial level or above.

The bulk of business travelers are from small- and medium-sized firms that have limited budgets. They are lured by return fares from Britain to mainland Europe as low as $36 — a quarter of the most competitive prices from mainline carriers.

"We attract a different type of corporate traveler, not from the multinational but from smaller, indigenous firms which are more cost-conscious," says Howard Miller, finance director at Ireland's Ryanair, Europe's biggest no-frills airline.

Some 40 percent of traffic at Ryanair is for business.

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