Business fliers go to the back

In the heady days of corporate travel, employees who had to take long flights, particularly overseas, could get their employers to spring for more comfy business-class seats.

They’re expensive, but companies figured it was better than losing a big contract or hurting a relationship because their employees weren’t attentive after a restless flight squished in coach.

But now during perhaps the worst downturn since the Great Depression, companies are curtailing or altogether eliminating business-class travel, sending many employees from the front of the cabin to the back of the plane.

And according to some travel experts, there’s probably no going back, even if the economy recovers.

“We’re looking at a permanent makeover,” said Joe Brancatelli, editor of business travel website JoeSentMe.com

He contends that every recession in the last generation has changed the nature of business travel for the worse. Indeed, with fewer companies willing to pay the much higher business-class fares, airlines are reconfiguring their planes to have fewer premium seats, slashing flights and operating fewer nonstops.

“When the economy turned back up, fewer business travelers were still standing, fewer airlines were still flying and the entire experience of living life on the road was harder, nastier, less fulfilling and more expensive,” Brancatelli said. “I don’t think this recession . . . will be much different.”

Falling demand isn’t all bad

Falling demand is opening up business-class seats that are also cheaper than they’ve been in a while.

In March, the number of international first- and business-class passengers fell by nearly 20%, continuing a downward spiral that began early last year, according to the International Air Transport Assn.

“We have not yet reached a floor to the fall in air travel,” said Seven Lott, spokesman for the airline trade group.

Revenue from premium fares slid even more -- down 35% to 40% -- as airlines offered deep discounts to fill seats that otherwise would have remained empty.

As a result, some business-class fares have slumped 70%, and in some cases, the fares match walk-up, fully refundable coach fares. It’s allowing some employees to stay in the front of the cabin.

Even when corporate policy restricts it, some savvy employees are booking “Y” class coach fares -- the fully refundable and fully changeable tickets -- and getting upgraded to business class.

At least it’s cheaper to travel

Hotel rates and airfares to top business markets in the U.S. and Europe continued to fall in the first quarter, some by as much as 15% over a year earlier, according to a survey by Expedia Inc.’s Egencia travel management unit.

“As companies tighten control over travel spending, the resulting decrease in demand has resulted in significant year-over-year declines in average daily rates and average ticket prices for most business markets,” said Rob Greybar, president of Egencia.

The biggest drop was in New York, where hotel rates fell by 20% in the first quarter compared with a year earlier and airfares to the city slid 15%.

Oddly, it was cheaper to fly to Washington, with fares down 8%, although it was more expensive to stay there, by 8%. One explanation is the presidential inauguration in January, which doubled the room rate at many hotels.

Los Angeles hotel rates and airfares to and from the city declined 9%.

The downward trend is expected to continue through the summer and fall, but the biggest drop is expected in the fall, when overall travel demand typically slumps.

“While capacity is still down year over year, we’ve seen some recent movement from the airlines to add capacity back in the summer months,” Greybar said. “This could provide the buffer we need for a further drop” in corporate airfares.

Carry-ons . . .

Rental car rates for corporate travelers are up 10% to 20%, as companies require their employees to downgrade cars, according to Egencia. . . . American Eagle, regional carrier of American Airlines, begins nonstop flights four times a week between Los Angeles International Airport and Roswell, N.M., on Aug. 25. . . . Pet Airways, a new airline for dogs and cats only, is scheduled to launch weekly flights July 14 between Hawthorne Municipal Airport and four cities -- New York, Chicago, Denver and Washington -- with $149 one-way teaser fares.

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peter.pae@latimes.com