A recent study by the Civil Aviation Authority shows a decline in international business travel to and from the UK. In 2008, the fall was recorded at 4.6 percent while 2009 saw a decline by 22.2 percent and further decline was recorded in the first half of 2010.
By all accounts, 2009 was the toughest year with the UK and European Union route recording a decline of 25 percent by volume followed by the UK and North America route – recording a decline of 20 percent, over 2008. Both regions were hit badly by the banking crisis which resulted in less financial professionals flying in these regions.
Although the first half of 2010 recorded traffic lower by 28 percent compared to 2008 levels – which can be attributed to Icelandic volcanic eruption, the latest data suggest that business travel has picked up.
“The recession hastened the migration of short-haul business travellers from business class to travelling in economy and using no-frills carriers”, found the report. CAA thinks that there is “a general acceptance that economic recovery will not reverse this trend”, a view shared by British Airways’ Chief Executive Willie Walsh.
Arguing that the economic slowdown has “accentuated the trend away from short-haul business class to economy and no frills”, Harry Bush – CAA’s director of Regulations adds “as growth returns, business travel will revive, but it is an open question how far some of the economies made in the recession will permanently affect the way companies allow employees to travel”.
The London route stood out since “the decline in business passengers using short-haul premium cabins is particularly marked (in this route), having reduced from 41 percent in 1996 to just 5 percent in 2009”.
An overall drop was noted by CAA and “a ‘step down’ in demand as a result of the recent recession, over and above that which would have been expected from the observed changes in GDP, trade or fares”.
Although technology has evolved and facilities like video-conferencing are easily available, “Face-to-face meetings will remain important to business travellers”, concluded Mr. Bush.