Airfare hike grounds business travellers | india | Hindustan Times
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Airfare hike grounds business travellers

According to industry estimates, business fliers comprise 60 per cent of the Rs 18,000 crore domestic air travel market. Corporates spend about Rs 5,400 crores on domestic travel per year.

india Updated: Jun 23, 2008 02:11 IST
Soubhik Mitra

Dilip Chaturvedi, a middle-level executive with a production house, shuttles between airports thrice a week to check locations and promote films. But thanks to the soaring airfares, he might soon lose out on this privilege.

“Especially for short distances like Ahmedabad and Baroda, we might have to make an overnight train journey,” said the 31-year-old.

Like Chaturvedi, several corporate fliers and small entrepreneurs who frequently climbed into flights after the boom in budget airlines might have to step down. “We are expecting a drop of 15 per cent and 5 per cent in domestic and international business travellers respectively,” said Anup Kanuga, chairman (western region), Travel Agents Association of India. “Renewal of contracts with corporate houses is expected to have changes.” Usually, corporate houses renew contracts with airlines depending on their annual accounts cycle.

According to industry estimates, business fliers comprise 60 per cent of the Rs 18,000 crore domestic air travel market. Corporates spend about Rs 5,400 crores on domestic travel per year.

Last year, Vodafone slashed its corporate flights by 13,500 and replaced them with video-conferencing. It is also believed that Philips is planning to reduce business travel.

Meelap Infotech Services, a video-conferencing facility, has witnessed a 60 per cent growth in business over the past three months. “People in the banking, marketing and the fashion industry opt for video-conferencing over travel. HR firms, too, use it to recruit people,” said Amol Athalye, proprietor. For instance, an architect hires Athalye’s studio to present a mall’s design to investors in Delhi. The cost: Rs 6,000, a fourth of travelling to the Capital.