Delta, AirTran seeing fewer corporate travelers

A steep decline in corporate travel is hitting AirTran Airways and Atlanta-based Delta Air Lines. The carriers are seeking ways to overcome a slowdown in business trips and weakness in the convention and meetings market.

“We’re seeing fewer and fewer people travel on the corporate side,” AirTran spokesman Tad Hutcheson said at a panel discussion at a TravelCom conference in Atlanta earlier this month. “We’re having to be creative.”

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Business travelers have typically made up a disproportionately large share of revenues for large carriers like Delta Air Lines.

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He said AirTran is now offering leisure deals to its corporate customers, such as a $50 voucher for a business traveler’s personal travel.

“We’re doing anything and everything to get people to travel,” Hutcheson said. “We need them to get off the couch and fly.”

He said AirTran views its “competitors” as not just other airlines, but also the home couch and videoconferencing.

And even AirTran itself uses videoconferencing. “Our marketing department is based in Atlanta, our headquarters in Orlando; we videoconference back and forth instead of getting on the airplane,” Hutcheson said. “So we’re trying to prevent that from our customers and yet we’re doing it.”

Business travelers make up a minority of total passenger traffic, but they have typically made up a disproportionately large share of revenues for large carriers like Delta. Delta has also seen large drops in international passenger traffic. To combat that, Delta is pulling back on its international expansion.

Although declines in leisure travel have cut into airlines’ passenger traffic, the drop in business travel has been much greater. While travel on economy tickets fell 8.3 percent in February, for example, the number of passengers traveling on premium tickets fell by 21.1 percent, according to the International Air Transport Association. The crisis in the banking industry, which IATA has called a “key sector of business travel,” has fueled much of the drop.

A survey of 110 U.S.-based companies by the Association of Corporate Travel Executives showed that 75 percent of respondents said their firms were aggressively restricting professional conference and training seminar participation, while 35 percent said their companies were eliminating registration reimbursement and denying requests for time out of the office.