Travel easy to compress made the charges

The effect of the crisis has prompted many companies to find quick savings. Travel, easy to compress, made the charges. Especially their comfort, pushed to stoicism: at the rear of the aircraft rather than in front, the two stars instead of the three. Now travel officials scrutinize the appropriateness of each trip, says Jean-Marc Dandurand, Director of the Department Board Europe of American Express. They prefer the train, day trips, are more reluctant to impose stopovers, modify the classes of comfort, sometimes limiting the Business only flights more than twelve hours. "A trip to eco divides roughly the price of the ticket by three from the Business," says Marc Leidelinger of Frequent Flyer Travel (Tourcom) indicating that travel agencies are encouraged to find rates always lower. Businesses, rather that agreement tariff 'corporate' linking them to a company, they are now hooked on the "best buy" (the best immediate rates). And "ready to give up to flexibility against reduced rates", laments Bruno Matheu, Director of marketing and network of Air France.

Other phenomena have reached companies: the "low cost" competition in short and medium-haul because the service is very similar in each and the other, the flow of the fuel surcharges which previously had boosted revenue per seat/km, the abandonment of the commissioning of travel agencies (which was proportional to the amount of the transactions). The latter will now pay the transaction and grow savings companies. Franck Brault Cabinet SKP adds that "30 to 40 purchases are still outside the"corporate"rules." "Many activities that are beyond the companies and degrade their income".

"All these companies have therefore accumulated decrease in traffic and lower average prices", summarizes Robert Darfeuille, Director at Carlson Wagonlit Travel which says "have never seen such a crisis."Many large companies have been affected. The heart of the problem comes from the fall of their "high contribution" recipes (first, business, and full fare eco classes dans short and mid-haul). The decline was three to four times greater than observed in eco, confirmed that Bruno Matheu of Air France which States that it is more pronounced in certain areas and in the long-range over-water. For Jean-Luc Grillet, Director France of Emirates, "airline activity from business travel fell by 30 in France".

The melting of the treasuries

According to Didier Brechemier, specialist in the air to the firm Roland Berger "passengers to the front of the aircraft decreased from 20 to 30 in 2009" (against-7 to 8 globally in an airplane). The result is that the turnover and margins (50 higher in business in eco, according to the consultant) degrade faster than filling planes and that companies are struggling to reduce their costs at the same speed. However, said Yves Crozet, Professor at the University of Lyon II, "one of the problems of air travel is that it is a high point dead activity and that as soon as the activity passes below the threshold of profitability, the losses accelerate".

In addition to the contraction of volumes and margins, companies also face melting of their cash. For Didier Brechemier, the greatest difficulties in this area will appear at the end of year 2009. "The sinews of war is now the cash", confirmed Patrick Malval, Director Europe to the West of British Airways. They can no longer count on bankers to cope and some analysts monitor how fast cash positions are burned to predict who will survive or not.

Where a price war exacerbated. "Everyone plays down, never as low tariffs in full season, including major companies or roads," observes Sandrine Saint Sauveur, President of CPA, representative of airlines. "Companies have a priority: to obtain immediate cash.".

Reduction of capacity

The only attitude that has hampered the Tailspin of prices was the reduction of capacity. Unfortunately, "there is no self-regulation in this area", said Bruno Matheu. As capacity reduction was facing structural limitations: type of aircraft used, fear of a shift in customer business by reducing the frequency, difficulty to reduce unit costs with smaller planes of reference remain positioned for an eventual recovery and logical of the hubs which impose does not reduce the "feeders" flights that fill the long haul.

In this context, if the economy is too slow or sudden new shocks, "it must think bankruptcies and bailouts," loose Didier Brechemier. Yves Crozet, believes that if the flu pandemic implied prohibitions of flights, the economy of the majors of the air would be destabilized. "It is additional sword of Damocles over the head of already weakened companies."

One of the causes of their current fragility is the price and services gap which was extended between the ECO and business classes. The results before the crisis were mainly generated by long-haul business class while eco classes covered not or barely fixed costs.

Driven by competition from Asia and the Gulf, companies had always enriched their classes Affairs, "reaching the level of comfort of the old first and very high, or even excessive prices for the first", find a specialist. Air transport activity long increased two times faster than the world growth and high rates contribution followed this trend by subsidizing the rear seats whose prices decreased, explains Bruno Matheu.

"The current crisis shows that the air product no longer corresponds to its market value," said Jean-Louis Barroux, President of the World Air Forum. "For years, he said, the Business Class of the companies European and American are sold at high prices. These "legacy airlines" simply mix the price to admit a difference of 1 to 3 or 4. But they were more working their product with customer expectations. ' For him, at the same time, "the rear seats were underpaid because of the"low cost"competition", which prevent them today to compensate for the decline in revenues from the high contribution by a rebound in prices for classes eco. ' "These last fell to a level of prices"low cost"in having kept their incompressible costs", summarizes an expert.