Business

Airlines risk losing business travelers to new rules

Tuesday, December 29, 2009

As federal authorities scramble to tighten airport security, airlines may be facing collateral damage if new procedures or new technology create longer delays. The airlines may lose business travelers, who are considered their bread-and-butter customers.

Business travelers have always been the airlines' best customers. They fly frequently and they pay higher fares because they seldom can book early. Tighter security could chase away those lucrative passengers.

"What the business traveler doesn't want to have to do is spend three hours at the airport to take a one-hour flight," says Forrester Research V.P. Henry Harteveldt.

Technology is making it easier for business travelers to skip the airport. San Jose's Cisco has seen rapid growth in video conferencing. Over 500 companies are regular customers and the service is available in 200 cities in 45 countries.

A new study by Forrester Research indicates 46 percent of business travelers used conference calling this past year, 17 percent did video conferencing, and here's what will have airlines worried -- 40 percent expect to be encouraged or required to do voice or video conferencing next year instead of flying to a meeting.

Harteveldt is the principal analyst for the airline and travel industries at Forrester Research. While technology is a long-term threat to airlines, tighter security could be a short-term issue.

"We saw post 9/11 business travelers and, for that matter leisure travelers too, learned how to adapt to what we called then the new normal. As we're in, what is this now, the new-new-new-new normal, people I think already are adopting," says Harteveldt.

The airlines and the nation's airports will be expected to live with whatever tighter measures the transportation security administration decides to implement.

"It's pretty much whatever they decide has to be imposed," says Mineta San Jose International Airport spokeswoman, Vicki Day. When asked if she had much say in the matter, she replied, "Not really, no."

One of the key questions still to be resolved is who exactly is going to pay for all the added security, especially the scanning machines that cost upwards of $170,000 each?

And the loss of privacy a full-body scan entails.

"If that's going to keep us safe, so be it," says traveler Diana Mallman.

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Tags:
terrorism, transportation, san jose, business, david louie
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