--------------------Business air travel sliding --------------------Car, train travel, Web use increaseBy Kelly YamanouchiTribune staff reporterApril 23, 2002Rob Scanlon, a partner in the Sales Research Institute, does business with clients in Chicago regularly from his Cleveland office, but more and more he turns on his computer to hold meetings instead of hopping on a plane.For his sales and marketing consulting business, Scanlon recently held a Webcast meeting and slide presentation with a potential client in Chicago."That won the deal for us," while reducing travel expenses and time, he said.Scanlon's cutback on air travel is becoming more common in the business world--companies continue to pare their travel costs by flying less and flying cheaper, according to a survey to be released Tuesday on business travel.According to the Business Travel Coalition's survey of 184 corporate travel executives, major airlines will see more reductions in business travel as greater numbers of employees opt to travel by train or car, and as Web conferencing gains acceptance.Sixty percent of respondents said they want to further reduce spending on airline services this year--and they already had cut spending on domestic air travel by 16.5 percent in 2001 compared with 2000.More than 31 percent said they want to cut air travel spending between 6 percent and 10 percent.Eighty-six percent of respondents said they expected to increase use of video conferencing and other technologies in place of air travel. About 77 percent said more people are driving cars for trips of less than 500 miles.Kevin Mitchell, who publishes the Business Travel Coalition's industry briefing, said business travelers want a simpler airfare structure."If you're sitting next to a business traveler who paid $1,000 and you paid $2,000, you don't care what the explanation is, you feel you didn't get a fair deal," Mitchell said.He said average fares would have to be reduced by 30 percent to rebuild demand."In my view, the airlines are never going to have the kind of pricing power they had in the late 1990s," he said.Airfares have fallen a bit because of competition from low-cost carriers such as Southwest Airlines, partly because a greater proportion of tickets sold are non-refundable, which tend to be lower cost.Non-refundable ticketsRespondents said the average one-way ticket price for domestic travel fell to $361.56 last year from $372.37 in 2000.About half of the tickets--50.6 percent-- purchased in 2000 were non-refundable, compared with 54.2 percent last year.Of the travel executives surveyed, a full 74 percent said some percentage of travel reductions would be permanent.Tom Huntington, who promotes systems management software for Help/Systems Inc. in Minnetonka, Minn., said he has reached more customers in a shorter amount of time by cutting back on travel and using Web conferencing more in the past two years."I can't imagine us ever again going around and doing seminars at these little towns all over the U.S. To me, the economics just aren't there," Huntington said.The nation's airlines, which have been in a tailspin since the economy began to soften last year and were further hurt by the terrorist attacks in September, took a more optimistic view of the trends.United Airlines spokesman Joe Hopkins said it remains to be seen whether corporate cutbacks in business travel will last."We feel that the situation is beginning to improve, not only for United but for the industry," Hopkins said. "I would like to think that as the economy improves, those companies that want to improve their businesses will get out and travel around."In fact, 65 percent of the 200 corporate travel managers surveyed by the National Business Travel Association last month said they have seen demand for travel increase by up to 10 percent or more since the beginning of the year.Security concernsStill, the association's survey also indicated that 40 percent of companies are considering reducing out-of-town meetings, 56 percent are considering using more conference calls and 49 percent would consider using Webcasts if security problems continue to bother business travelers.It also showed that more than a third of respondents thought it would be another nine to 12 months before business travel recovers.However, no one is suggesting that face-to-face business meetings will become a thing of the past.But one way the airlines could rebuild traffic would be to make it easier to fly, coalition respondents said.Business travelers say the additional time needed to make it past airport security checks has led them to consider other alternatives."Many companies think travel is no longer a productive means of conducting business," says Rick McConnell, president of Latitude Communications, in Santa Clara, Calif.Many also said they would like to see a "trusted traveler" type of program, where frequent airline users would be subjected to fewer security checks.How such a program would be implemented in the wake of tighter checks is not clear, they said."We're still looking at that technology and trying to decide if it makes any sense," Hopkins said. "We haven't found anything yet that solves all the problems."Mitchell's report also said that stricter bookkeeping in response to the fallout from the Enron-Andersen accounting debacle will lead to higher expenses, and that travel would be cut to compensate for those expensesThe coalition, based in Radnor, Pa., conducted the study in collaboration with Unisys Corp. between March 20 and April 12. Companies that were surveyed had an average annual air travel budget of nearly $16 million.Copyright (c) 2002, Chicago Tribune