Is This the End of Business Class?

An interesting group has joined the ranks of the penny-pinching 99 percent: business travelers.

As directed by their budget-minded employers, more and more business travelers are snagging cheap tickets in cattle class on long-haul flights.

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According to an article on MSNBC.com, the number of passengers flying business and first class on international flights dropped sharply in October.

“We interpret this as being mostly due to business travelers shifting to cheaper seats, since in October economy travel was up 4 percent on last year,” IATA said in its monthly premium traffic monitor.

The trend continued in November, as the number of premium ticket buyers was 6.7 percent lower than the year before.

The decline in business class travel overseas is seen as an economic indicator of sorts. The stalling international trade markets and a loss of confidence in business in the wake of the European debt crisis mean that airlines could face up to $8 billion in losses in 2012, according to MSNBC.

Premium Travel Trends
Before the economic crisis snowballed two years ago, premium travel made up 9 percent to 10 percent of international air travel, according to an article on FoxBusiness.com.

But companies hoping to cut costs have restricted employees from purchasing premium class tickets.

A survey by the Global Travellers Association found that 56 percent of companies require employers to consider departing two hours earlier or later than their preferred departure time if it means paying a lower fare. And just 10 percent of companies allow employees to upgrade seats on flights within North America.

However, while some business travelers are heading to the back of the plane, there are still plenty of super-rich passengers who have not been bitten by the frugal bug.

Airline Upgrade Secrets: 10 Ways to Get that First-Class Seat

Should We Wave Business Class Goodbye?
So does this trend spell the end of business class? Unless airlines can find another way to make ends meet – not likely. Most carriers rely on premium travel to meet earnings goals.

And while many companies have stopped buying first- and business-class tickets for short-haul flights, some seem to be loosening the rules a little.

The Edmonton Journal reported in September that, “The number of North American companies that allow premium-class air travel rose five percentage points to 56 percent in 2011 from a year ago, according to the Global Business Travel Association.”

Edmonton also noted that higher-end hotels are also seeing an uptick as companies start feeling more financially secure.

From the sound of things, it looks as if that new-found kinship to the “Occupy” protestors might be short-lived – at least for a small subset of business travelers: The one’s whose companies no longer feel the need to hide ostentatious displays of their profits.

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Published: January 9, 2012