Business class seats hit by tight corporate travel budgets

SINGAPORE — Flying overseas, looking for air-ticket deals? Don’t forget to scan the business class offers or bargain an easy upgrade to the premium cabin. Airlines are increasingly putting business class seats up for grabs at even 50 per cent discount as they feel the heat flying with lighter load at the front end of the planes. Thanks to corporates and businesses tightening their belt on travel budgets amid gloomy economic environment.

The latest to put up premium seats on sale are Etihad Airways which is offering a 50 per cent discount while Malaysia Airlines is offering two for the price of one — both tactfully targeting business travelers in the region. “Being well aware of the travel budgets cut by companies, especially on short-haul flights, some airlines have reconfigured aircraft used on certain sectors to cut down on business class seats. Airlines are having premium seats on sale to try and boost demand,” said Ms Mavis Toh, Asia Air Transport Editor — Flightglobal.

To entice corporate travelers with value for money services, full service carriers, including Singapore Airlines, have been introducing premium economy seats. According to CAPA — Centre For Aviation, there are currently 10 airlines in Asia Pacific offering premium economy seats with Singapore Airlines as the only Southeast Asia carrier to offer this service, but to be soon joined by Philippine Airlines.

A report by the aviation industry research firm, however, noted that while premium economy has proven to be successful at several Asian airlines, the product can be challenging to sell. “Since premium economy varies widely and distribution systems do not accurately capture the offering, it is critical for airlines to be in touch with their local market and effectively market the product. There is also an issue of selling seamlessly across different airlines on more complex routings, notably among global alliance members,” the report said.

In response to TODAY’s queries, Mr Thierry Antinori, Chief Commercial Officer of Emirates Airline said that the airline combines “a wide range of travel choices in First, Business and Economy Class, with special rates to offer would-be travelers appealing value propositions”.

Meanwhile, low cost carriers (LCCs) are leaving no stone unturned to cash-in on the corporates’ move to slash travel expenses, with increased focus on enhanced network coverage, on-time performance, frequency of flights and customer service tailored for the savvy business traveler looking for value.

“Companies and employees are no longer fixated on flying a full service airline, especially for short-haul flights, where what is most important is that the flight times fit their schedules. That is why you see AirAsia doing brisk business between Singapore and Kuala Lumpur, and the likes of Lion Air doing well on Singapore-Jakarta,” Ms Toh added.

Consequently, the demand for budget airline seats particularly on early morning and late evening flights have been surging. “Our flights are full of ‘business suits’ in the morning as they travel for meetings abroad and return on the same day, in time for dinner with their families,” said Mr Bara Pasupathi, CEO of Jetstar Asia.

A Tigerair spokesperson also said that the airline has seen “an increasing number of queries from corporations expressing interest” in the airlines flights and services.

Early last month, at the sidelines of an event to announce SIA’s induction of A 350 aircraft in its fleet after nearly 10 years of order placement for these fuel efficient planes, chief executive officer of SIA Mr Goh Choon Phong had said, “At this point we are not seeing a weaker demand in business class. There is pressure on pricing and yields. But, with the kind of outlook we are seeing in the world economy, we do expect that it will affect business demand.”

Singapore Airlines has not seen a slowdown in demand for business class travel, an airlines spokesperson said in an email response to queries.