The aviation sector in 2009 was considered to suffer its greatest turbulence as a result of the global financial crisis. Enterprises were cutting down business travel costs to streamline the total budget, which resulted in a decrease in the number of business travelers. With the rebound in the economy, enterprises are now making changes to their business travel budget plans for 2010.
IATA: Asia Pacific Oustrips North America
The International Air Transport Association has commented that in 2009 the number of travelers in the Asia Pacific region was higher than in North America. Asia Pacific has become the world's largest civil aviation market. The number of business trips in the Asia Pacific region has reached 647 million, while for North America the number is 638 million (including domestic trips). It is estimated that by 2013, the number of trips in the Asia Pacific region will have increased to 217 million.
Survey results for China's business travel market in 2009 released by American Express Business Travel show that the business travel market in China has been growing, despite the financial crisis. Of the 180 enterprises from Shanghai, Beijing Guangzhou that took the survey, 29% had increased their expenditure on travel and entertainment in the 12 months prior to the survey; 55% had basically remained the same as in 2008; and only 16% had cut their spending on travel and entertainment.
Gregor Lochtie, the vice president and general manager of Greater China American Express Business Travel, stated that the survey also shows business travel is of great importance to many Chinese enterprises even in a period of economic turmoil. In the 12 months prior to the survey enterprises were more interested in maintaining existing customer relationships than in developing new clients. This was a new trend that appeared in 2009. Now many enterprises are strengthening supervision and control of business travel expenses, implementation of business travel policy is improving, and the compliance of staff to these policies is also increasing. It is estimated that Chinese enterprises' travel and entertainment expenses will keep increasing in 2010. In this survey, 31% of the enterprises said they will increase expenses on travel and entertainment in the next 12 months with the continuing development of the Chinese economy and trade and the reform of domestic economic policy.
Statistics show that the global business travel market is growing by 4% to 5% annually as global cooperation increases. The Chinese business travel market is now the second largest in the world and it is one of the fastest growing markets: the market size has reached CNY50 billion, with air ticket expenses accounting for 30% of the total. Business travelers are a group of high-end travelers that airlines are carefully developing and maintaining, because they are relatively stable sources of revenue and often choose higher priced tickets.
Though estimates say the business aviation market will grow in 2010, enterprises will still stick to their strict budgeting plans from 2009. About 30% of enterprises will increase the number of business trips they make in 2010: however over the last 12 months staff have undergone some psychological changes. They have accepted that fact that discounts in comfort save money for their companies. However enterprises have taken supervision and control of business travel expenses as one of their key tasks. Air tickets and hotels are undoubtedly the major parts in business travel expenses. How the two can be packaged to attract loyal long-term customers, and to sell at a good price is now a common concern for airlines.
SAS: Business And Economy Both Suitable For Business Travelers
Lars Olofsson, the general manager of Scandinavian Airlines Greater China Region, told China Hospitality News that in 2010 SAS will attach great importance to MICE travelers in its marketing, and will enhance cooperation with MICE travel agencies. Round-trip flights to and from Northern Europe will be much faster and more convenient. The airline's partnership with Copenhagen Airport reduces the shortest transfer time in Copenhagen from 40 minutes to 30 minutes, which means passengers to Stockholm, Oslo and many other places in Northern Europe will be provided with more and faster transfer services. Moreover, the luggage service will be more efficient, and a dedicated SAS check-in area will be built in Copenhagen Airport. Copenhagen Airport as a hub airport offers great convenience for SAS flights to London, Paris, Duesseldorf, and other major destinations in Europe and shortens the transfer time to a maximum of two hours and 35 minutes.
Olofsson also stated that in 2010 SAS will continue to operate the policy that 33 cities in mainland China enjoy the same price for round-trips to and from Europe. These are: Changchun, Changsha, Chengdu, Chongqing, Dalian, Fuzhou, Guangzhou, Guilin, Harbin, Haikou, Hangzhou, Hefei, Hohhot, Kunming, Lanzhou, Nanchang, Nanjing, Nanning, Nantong, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Sanya, Taiyuan, Wenzhou, Wuhan, Wuxi, Xiamen, Xi'an, Zhengzhou, and Zhuhai.
For business travel budgets, Olofssen suggests enterprises cooperate with travel companies to choose comprehensive and more cost-effective package products. He also introduced the flexible ticketing choices for SAS flights, and said they have introduced the Economy Extra class, which offers passengers business-class travel at much lower economy-class prices. To ensure a pleasant travel experience, SAS has built separate a cabin to ensure that the surroundings will be more spacious and quieter; though the Economy Extra won't be faster, it will a least be more comfortable. Passengers can check in at business-class desks without waiting in a queue, get through fast-track security examination, and enjoy priority boarding and higher baggage limits, such as an extra item of hand baggage.
There are two price types: fully flexible and Fixed. There are no restrictions at all on passengers with fully flexible tickets who can rebook and get refunds at no charge, and there is no time limit for the shortest stay. SAS's newly-unveiled Fixed ticket offers the cheapest tickets for all three classes, but it does not allow changes or refunds and there is a time limit of five days for the shortest stay. SAS also offers more flexible ticket combinations. For example, one can go on Economy Extra, and come back in economy class. What's more, EuroBonus SAS members who take the Economy Extra will be rewarded with 150% EuroBonus points.
Korean Air: Second-tier Cities Show Hugh Potential In Business Travel
Zheng Bingxie, the general manager of the passenger department of the China Region of Korean Air, said that the number of travelers paying for business class seats is increasing with the development of the Chinese economy. Business travelers are mainly high-end consumers from large enterprises. They have higher demands for service, and that is the reason they choose business class seats. On the China to South Korea air routes, demands from business travelers for major routes such as Beijing to Inchon are much greater; and the fast-developing second-tier Chinese cities are also showing great potential in business travel market.
Korean Air has introduced "business discount tickets" for some key routes, enabling travelers to experience perfect service at a lower price.
Talking about the advantages of the airline, Zheng estimated that Korean Air has the most destinations in China out of all the foreign airlines. It has been expanding its routes between Chinese capital cities since it launched the first route in China. In 2009, it has launched a new route from Xi'an to Mudanjiang, increasing the total number of routes to 28; and this has offered great convenience to South Korean and Chinese travelers. Also, Korean Air has set up a counter at Incheon International Airport for especially for Chinese travelers which has greatly shortened the check-in time.
Zheng also said that Korean Air will use new aircraft with new seats for some Chinese routes in 2010 which will bring a more comfortable experience to Chinese travelers. The new aircraft are also equipped with audio-visual on demand systems. Business travelers are high-end consumers. They usually pay much attention to the seats and meals of airlines when choosing the best one. This airline has introduced promotional seats for its business class on some of the popular American and European routes to enable business travelers to enjoy high-level services at a lower price. Starting in March 2010, Korean Air has also increased promotional packages on some Korean routes. It has also signed agreements with some enterprises to give concessions on the ticket price.
Tianjin Airlines: Committed To Developing New Products
HNA Tourism was founded in Beijing in March 2007. It is one of the eight industries HNA Group is engaged in and is the core enterprise for HNA's aviation and travel sector. It also plays the role of resource integration and business expansion in HNA's tourism industry chain. In the HNA Tourism group, there are more than 200 aircraft, about 50 star-rated hotels, and over 20 travel agencies. These include Hainan Airlines, Deer Je, and HNA Hotels & Resorts.
HNA Tourism's business covers the six elements for tourism: dining, accommodation, transportation, travel, shopping, and entertainment. It is good at providing customized long-haul travel services to organizations and individuals as an aviation and travel professional, as a customized travel professional, and as a top designer and supplier of tourist products.
Tianjin Airlines, formerly known as Grand China Express Company, is has as investors HNA Group, Tianjin Port Free Trade Zone, and Hainan Airlines Company, and it was founded on June 8, 2009. It mainly targets high and medium-end business travelers. Tianjin Airlines introduced a customized service in 2009 to satisfy individual requirements of customers.
Besides offering scheduled air services, Tianjin Airlines also offers a charter flight service according to customers' specific requirements. Tianjin Municipal Government, Inner Mongolia Autonomous Region Government, and Xinjiang Autonomous Regional Government are all customers of the airline.
Tianjin Airlines will continue to be committed to the high-end business travel market in its new product development plan for 2010. In 2009 the airline introduced its business travel card" as the first of its "friend unlimited" series, and will continue to work on this series of products to introduce more products that provide the convenience of a one-stop service to business travelers. The airline will reward its clients according to their actual consumption records or according to the actual needs of clients. The reward could include free air tickets, hotel accommodation or travel product packages.
Tianjin Airlines has already launched three new routes in 2010 for its Embraer E190 aircraft: Xi'an to Guiyang and Haikou, Ordos to Tianjin and Dalian, and Tianjin to Qingdao and Wenzhou.
Dozens of air routes are waiting to to be opened in 2010. For the E190 aircraft there are: Tianjin to Wuxi, Xi'an to Jinan, Xi'an to Yinchuan, Tianjin to Wulan, Tianjin to Changsha and Haikou, Tianjin to Changzhou and Xiamen, Tianjin to Zhengzhou and Guiyang, Tianjin to Zhengzhou and Guilin, Tianjin to Wenzhou, Tianjin to Linyi and Guangzhou, Xi'an to Jinan and Dalian, Xi'an to Hohhot and Shenyang, Nanning to Hefei and Qingdao, Nanning to Chongqing and Yinchuan, Nanning to Wuhan and Taiyuan, Nanning to Changsha and Jinan, and Tianjin to Xi'an and Xining. For E145 aircraft, there are Hohhot to Hailar, Hohhot to Yinchuan and Lanzhou, Tianjin to Taiyuan and Lanzhou, Tianjin to Weihai and Shanghai Hongqiao, and Tianjin to Hefei and Nanchang.