CLIPPING EXECUTIVE WINGS

SHOW a finance director where to cut costs and he or she reaches for the calculator. So when it comes to a choice between staff travelling for GBP 500 or GBP 200, the decision is obvious.

In the current economic climate, with cutbacks in travel spending clearly on the agenda, the popularity of flying on a low-cost carrier has risen.

Increasingly, business travellers are marching towards Stansted and Luton instead of Heathrow to fly off to a European meeting. Some executives begrudge squeezing into a seat on a low-cost carrier, next to the elbows of a family heading for a holiday. Others are pleased about the savings, particularly if it's their own business. Originally, low-cost airlines like Go and easyJet targeted leisure travellers, but they have become aware that many passengers are strolling towards the gate with briefcases in hand. Companies like Bull Information Systems and BT are putting senior personnel on low-cost carriers and are spotting the difference to the bottom line. Debonair claims more than 11,000 frequent business travellers, with 60 per cent of passengers flying on business, up from 30 per cent on launch. It plans a fast-track service in the new Luton terminal and to work with Virgin Express on a joint frequent flier programme. Most travel experts acknowledge that the launch of Go from Stansted focused the eyes of the business world on low-cost travel. Carlson Wagonlit's Jim Tweedie says: "When BA launched Go, it was really aimed at leisure travellers, but now it is taking corporate travel business." Apart from the fact that Stansted is reasonably close to the City from Liverpool Street, Go had two more things going for it. It was backed up by a big business name and almost immediately went to two or three flights per day on routes, offering flexibility. Now low-cost carriers are consolidating their position with company executives putting aside earlier reluctance to work with travel agents. EasyJet has been wooing agents and suggesting they book their clients on and charge them a fee for the service. And last week Go teamed up with American Express, a deal which allows Amex to book clients onboard more easily. Tweedie says Go's popularity is starting to take away bookings from full-price carriers. But for BA there is no going back, and other scheduled carriers, including Lufthansa and SAS, are expected to follow with low-cost alternatives, bringing competition in areas of Europe where prices have traditionally been held at unreasonably high levels. Now European flight prices are falling fast, down by at least eight per cent in the last year, according to Carlson, influenced partly by increased competition and partly by fears about recession. Go's arrival in Germany, for instance, has forced national carrier Lufthansa to lower its prices. Debonair's chief executive Franco Mancassola, also flying into Germany, says no one is making money, but that Lufthansa had to respond. The German carrier, as well as KLM have started taking the mandatory Saturday night stays out of cheap deals. Carlson Wagonlit research found nearly half of business travellers surveyed had tried a low-cost carrier, although 15 per cent claimed that they would not travel on such flights at any price. Scandinavia's SAS admits it is threatened by the arrival of Go and Ryanair. Catharina Teorell of SAS says: "They can be much more cost- efficient than we can." Few people seem to care about getting a meal on a short flight, asking why pay an extra GBP 100 or GBP 200 for the privilege. Consultant Bob Stockwell, who recently flew with easyJet to Nice and saved about GBP 200 compared with a BA flight, comments, "Service on board was basic, but I wasn't disappointed". Amex's Matthew Davis says the difference in price can be so large that some travellers are prepared to put up with using secondary airports and the extra transfer time. Consultant Olivier Dombey has used Debonair to fly to Madrid. He calculated the saving over British Airways or Iberia and decided the inconvenience of getting right across the city to Luton was worth it. Basic services can create difficulties, however. Technologist Mike Cogan's easyJet flight to Glasgow was cancelled and he battled to get his money back because the airline's electronic ticketing left him without a paper ticket. Neither Fry nor Tweedie believe low-cost carriers will dominate business travel or are likely to move to the long-haul market, where prices are already comparatively lower than European routes and passengers appreciate their creature comforts, such as food and entertainment on board. "We saw it in the Eighties with People's Express and Laker, plus there are already some great deals across the Atlantic," says Tweedie. To Madrid Debonair: From Luton Airport. One flight a day. Return fare GBP 130 (including sandwich and soft drink). easyJet: From Luton. Once a day. Return fare GBP 138 (no food or drink included). British Airways: From Gatwick and Heathrow. Seven outward flights daily. Economy return GBP 479.30 (including meal). Iberia: From Heathrow. Five times a day. From Gatwick once daily. Economy return GBP 505.30 (including meal). To Nice Debonair: From Luton (from 1 June). Once a day. Return fare GBP 180. easyJet: From Luton Airport. Three times a day. Return fare GBP 120.20. British Airways: From Heathrow. Four times a day. Economy return GBP 529.20 (including hot meal). Air France: From Heathrow. Twice a day. Economy return GBP 397.90 (including meal). (All midweek departures, flying back next day; fares include tax) NO FRILLS v THE BIG BOYS

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