Fuel Costs May Curb Company Trips

Passengers boarding American Airlines Flight 313 in New York yesterday got 25,000 free frequent-flier miles.
Passengers boarding American Airlines Flight 313 in New York yesterday got 25,000 free frequent-flier miles. (By Diane Bondareff -- Associated Press)

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By Keith L. Alexander
Tuesday, May 2, 2006

Record fuel prices are forcing many businesses to curtail travel and have prompted some to begin adjusting their 2007 travel budgets, according to a survey of 1,700 corporate travel managers conducted by the National Business Travel Association.

Companies are looking for ways to reduce their travel expenses in the air and on the ground as airlines have jacked up fares and the costs of using car services and rental cars has risen.

"Every company approaches reaching these savings differently to reach their business goals as rates continue to go up," NBTA spokesman Caleb Tiller said.

More than half of the association's members with large travel budgets said their airline ticket prices have increased $51 to $100 in the past year. If airfares remain at the same level or increase, 43 percent of the travel managers surveyed said, they would have to adjust their travel budgets for 2007. One-third of companies said they were requiring less air travel.

Travel managers also are demanding that employees organize their trips more efficiently. Nearly 37 percent of respondents said they now require travelers to consolidate multiple trips into one.

Some nonprofit organizations also are struggling with higher travel expenses. Nicholas Lananna, UNICEF's chief of travel and general services, said the organization is paying $65 to $180 in fuel surcharges on international flights to Africa, Asia and the Middle East. Last year, he said, UNICEF paid $10 to $15 in surcharges on international flights.

Lananna said UNICEF is considering increasing its daily travel per diem for its staff on the road. The group's 200 or so travelers get $275 a day, which has to cover hotel, meals and other needs. UNICEF may have to increase the per diem by as much as 10 percent to cover rising costs, particularly in large cities such as Washington and New York. The organization then would have to solicit additional funds from donors since UNICEF receives most of its funding through donations.

"We can't raise our prices to cover our travel costs. We have to be creative where we can," Lananna said.

One creative solution for UNICEF could be more video conferencing. In the survey, nearly 30 percent of travel managers said they were urging people to use travel alternatives such as Internet conferencing.

Companies also are reducing the use of chauffeured private sedans for trips to the airport. Nearly 21 percent said they are using these cars less because they are more costly than taxis; 14 percent of managers said they are using taxis more than they had in the previous year.

Rental cars also were losing some favor with travel managers, with 17 percent saying they were using them less these days. With gasoline prices soaring, about 15 percent of respondents said they were pushing employees toward use of public transportation.

Depending on the destination, nearly 15 percent of travel managers are avoiding renting a car and are requiring their employees to use public transportation instead of renting a car.


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© 2006 The Washington Post Company

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