dontdoit
3rd Jun 2003, 03:58
From travelmole.com:
Low cost carriers are 'out of date', says Carlson
Low cost carriers are “out of date” and not as cost-effective as most businesses believe, according to travel management firm Carlson Wagonlit Travel.
Carlson’s research studied 24,500 routes used by business travellers in Europe along with the travel patterns of 38 Europe-based multinationals.
While almost half of the companies interviewed considered the savings from budget airlines could be more than 10%, Carlson claims that the maximum saving to be had is just 3% to 5%.
It says that despite increased use of the airlines by business customers “there is a gap between the potential cost savings and the reality.”
Carlson points to issues such as the fact the lowest fares need to be booked a long time before departure, and that refunds and ticket exchanges are less flexible.
It also claimed that savings are not always automatic - partly due to dynamic pricing. Prices for a given seat on a route may change rapidly and continuously according to demand. According to Carlson: “The cost of one leg may even alter by a factor of four to five times on the return leg.”
In addition Carlson claims that the budget airlines have become “out of date” since mainstream carriers such as BA responded to the low cost threat with similar pricing models and also focused on service. According to Carlson “the issue of low cost carriers is becoming outdated in parts of Europe - with the UK taking the lead”.
Executive Vice President Europe Richard Lovell said: "We believe that a saving of three to five per cent of total travel spend may well be a maximum in today's environment. This is because there are still a significant number of constraints to be overcome before the low cost carriers' services truly meet the business travellers needs today".
But Carlson's claims have been rubbished by easyJet. A spokeswoman told TravelMole: "This is complete nonsense. If there was no low cost carriers there would be no competition so the larger airlines would hike prices up again. Businesses need the products and cost savings we offer, they don't need a free newspaper and a plastic meal."
The spokeswoman pointed out that easyJet had started to cater for corporates with the launch of a B2B website that allows travel managers to access management information.
Low cost carriers are 'out of date', says Carlson
Low cost carriers are “out of date” and not as cost-effective as most businesses believe, according to travel management firm Carlson Wagonlit Travel.
Carlson’s research studied 24,500 routes used by business travellers in Europe along with the travel patterns of 38 Europe-based multinationals.
While almost half of the companies interviewed considered the savings from budget airlines could be more than 10%, Carlson claims that the maximum saving to be had is just 3% to 5%.
It says that despite increased use of the airlines by business customers “there is a gap between the potential cost savings and the reality.”
Carlson points to issues such as the fact the lowest fares need to be booked a long time before departure, and that refunds and ticket exchanges are less flexible.
It also claimed that savings are not always automatic - partly due to dynamic pricing. Prices for a given seat on a route may change rapidly and continuously according to demand. According to Carlson: “The cost of one leg may even alter by a factor of four to five times on the return leg.”
In addition Carlson claims that the budget airlines have become “out of date” since mainstream carriers such as BA responded to the low cost threat with similar pricing models and also focused on service. According to Carlson “the issue of low cost carriers is becoming outdated in parts of Europe - with the UK taking the lead”.
Executive Vice President Europe Richard Lovell said: "We believe that a saving of three to five per cent of total travel spend may well be a maximum in today's environment. This is because there are still a significant number of constraints to be overcome before the low cost carriers' services truly meet the business travellers needs today".
But Carlson's claims have been rubbished by easyJet. A spokeswoman told TravelMole: "This is complete nonsense. If there was no low cost carriers there would be no competition so the larger airlines would hike prices up again. Businesses need the products and cost savings we offer, they don't need a free newspaper and a plastic meal."
The spokeswoman pointed out that easyJet had started to cater for corporates with the launch of a B2B website that allows travel managers to access management information.