Low-cost flying scores for flashy companies

Low-cost travel is not exactly what you would expect corporate India to fly, but studies suggest that companies do patronise low-cost carriers (LCCs). This is for reasons of economy as well as connectivity to small towns, which are not on the radar of full-service carriers.

Information Technology (IT) solutions provider Amadeus, in a recent study, found that 60 per cent of the companies used low-cost carriers (LCCs) to fly their executives. Around 100 companies were surveyed.

The companies surveyed covered a variety of sectors including IT, infrastructure and real estate. They were large companies with a minimum of three hundred trips a year.

LCCs estimate that corporate travellers comprise around 40 per cent of their clientele.

Spicejet executives say that 30 per cent of their passengers are business travellers.

Top-level corporate honcho may still be opting for full-service luxuries but companies are increasingly using LCCs for their middle-level management team.

"We have several middle management -level companies travelling in our airlines. Another category comprises the rich businessmen and merchants," said an airline official.

LCCs are also offering attractive deals to the companies to woo companies. Spicejet Chief Financial Officer Partha Basu said that they will soon be approaching companies with various offers.

"Our team is currently working on a three-fold offer. One is that for every ten tickets you get the eleventh one free. Secondly, for bulk travellers we are giving a year-long offer in which they get these tickets at a fixed subsidised price. Another is that even if a corporate traveller books a ticket on the last day (which they usually do since such decisions are taken at the last hour), they get a discounted price," Basu told Business Standard. "We are looking at attracting middle management clientele and small businessmen," he added.

The introduction of low-cost carriers has actually helped several small and medium level enterprises to expand, says GoAir Managing Director Jeh Wadia.

"Earlier, a small business owner could open only one additional office in a year. He can now open three in the same period in various parts of the country. This is primarily due to the cheaper rates offered to them on flights which helps them make more frequent air travel," says Wadia.

With LCCs providing connectivity to small upcoming industrial towns and cities-executives in small and mid sized companies are also being wooed to fly on them.

Places like Ahmedabad, Port Blair and Raipur have recently seen tremendous industrial growth which makes corporate travel necessary but they are still serviced by mostly low-cost carriers. So the corporate traveller has no option but to take that service.

This trend is also catching on internationally. Says a senior official of Thai LCC Nok Air, "Though companies travelling low-cost international travell is yet to catch on, there is considerable use of low -cost travell within the country. For our operations within Thailand we get around 35 per cent of corporate travellers."