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No-frills flights to trim business travel by £1bn

The soaraway success of the no-frills airlines market is expected to cost the business travel industry more than £1bn this year as executives opt for cheaper air travel to slash corporate costs, research has shown.

A quarter of frequent travellers intends to forgo the luxuries of business class for the cattle-herd qualities of budget airlines, according to the research boutique Saville Rossiter-Base.

Half of all corporate travellers have taken an average of five no-frills flights this year, up from one-third in 2001, a survey found. In total, business travellers' use of budget airlines has risen by 15 per cent in the past 12 months.

The surge in popularity of flights offered by Ryanair and easyJet has been propelled by the global economic downturn, forcing companies to opt for no-frills flights. The survey found that one in ten companies had cut its travel budget in the last six months. In more than half of cases budgets were slashed by up to one-fifth.

Kay Rossiter-Base, at Saville Rossiter-Base, said: "Many of the most frequent business travellers have switched from premium travel offers to economy class or to low cost airlines as a result of budget cuts and changes in corporate policies."

She warned that unless the traditional airlines, many of which have been plunged into heavy losses, re-evaluated their pricing structures for business travel they would continue to lose out.

A British Airways spokes-man said that while the group had been hit by customers trading down to cheaper flights, it had fought back by revamping its corporate offering. The airline has rolled out a new fare structure for business destinations offering routes to key European cities from £69 return.

The spokesman added: "The short-haul market has changed dramatically for us. We have to compete intelligently and offer products at value-for-money prices."