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Budgeting for '04 up in the air.

Article Excerpt
Setting budgets for the coming year's corporate air spend is not getting any easier for travel managers facing an evolving marketplace. Considering major overhauls underway at network carriers, the growth of low-cost airlines, continued economic uncertainty and sophisticated decision support tools used by suppliers to carefully analyze client travel patterns, this year's cycle arguably is more challenging than ever before.

In years past, travel management companies, consultancies and other industry observers offered varied forecasts on projected corporate air spend but generally agreed at least on the direction. For 2004, predictions and perceptions are so wide-ranging that buyers are approaching their budgeting season with less clarity and more caution. Many travel managers simply are assuming their companies' air spend will be flat based on several offsetting factors.

Nevertheless, there are several elements in play that suggest air travel expenditures will move in one direction or he other. Of course, an improving economic environment not only would boost corporate growth and spur more business travel demand but potentially also could empower airlines to raise fares. Deutsche bank Securities economist Peter Hooper predicted economic growth in the second half of this year to rise to 4 percent, versus 1.9...

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