Business travelers may catch a price break in 2009

— -- With oil prices plunging as fast as the latest economic indicators, many business travelers are wondering if travel costs may tumble as well in the year ahead. The answer will depend on a number of factors yet to be determined, but there are good reasons to believe that business travelers may catch a break in 2009, and may even find some bargains in their travel shopping.

Fewer seats, fewer passengers

A six-year global economic expansion drove a 40% increase in airline passengers worldwide, according to the International Air Transport Association (IATA). Rising demand usually pushes prices upward, and during that same period IATA reported an 80% increase in world airline passenger revenues. Concurrently, U.S. domestic airline ticket prices surged 14%, according to the National Business Travel Association (NBTA) — excluding all those new, ancillary fees and surcharges. Since the beginning of 2007 U.S. airlines successfully raised airfares at least 30 times, according to Farecompare.com .

Now in the throes of global recession, travel demand is declining for the first time since the period following the 9/11 attacks. From July to November, travelers on the top seven U.S. airlines declined by 15%. The Air Transport Association projects U.S. airlines will carry 9% fewer travelers this holiday season than last year, as Americans postpone trips or stay closer to home. More importantly, IATA reports that premium, high-end, worldwide passenger traffic, which is almost exclusively business travel, declined 8% in 2008.

Just one year ago, skyrocketing oil prices forced many smaller airlines out of business. Surviving carriers grounded unprofitable flights and gas guzzling jets. With U.S. domestic capacity trimmed by 10% or 15%, airplanes flew full and airlines successfully raised fares and imposed fees and surcharges. Now many consumers have curbed spending and some will make fewer trips at any price in this still-unfolding economic crisis. If the current situation continues – and there is every reason to believe it will, at least through 2009 – many U.S. airlines may slash capacity again, but slumping travel demand may push prices downward anyway.