Why the decline in business travel is bad news for everyone

Posted: 5 February 2018 8:26 am


The FIFO worker slump has consequences even if you're not a mining company.

Australian workers aren't jumping on planes quite as often as they used to. The percentage of Australians travelling for business has dropped from 12.3% in December 2010 to 11% in December 2017, according to Roy Morgan. That still means 2.2 million Aussies hit the skies for work last year, but it is a notable drop in just seven years.

The big driver in that change is not tightening corporate belts, but the overall slump in the mining sector. You might think of a business traveller as being someone in a suit with an improbably expensive laptop, but fly-in fly-out (FIFO) mine workers are a solid proportion of the market. Incidentally, that's why Qantas' lounge dress code bans gym gear and sleepwear but makes an exception for hi-vis uniforms (with the only requirement being that they're "clean").

The impact of mining is particularly evident in the states with the two biggest drops over that period: Western Australia and Queensland. Back in 2010, 15.7% of sandgropers were flying for work, but that number has dropped to 11.6%. The drop for banana benders is nearly as high, with Queensland falling from 14.1% to 10.2%. Victoria bucked the trend, with the number of travellers rising slightly from 10.2% to 10.5%.

Why does that matter if you're not a mine worker? Regular business flyers provide a predictable source of income for airlines. Fares for flying into mining towns never see the kinds of discounts you might notice on tourist routes because the airlines don't have to indulge in sales just to keep the planes full. If there's a FIFO workforce, you can budget very effectively for what the loadings will be.

Airlines being more profitable means that they offer a better service. That can be reflected in new options like in-flight Internet, which Australian business travellers are very keen on. It can also be reflected in smaller details, like getting a decent in-flight snack rather than a miniscule dried-up sandwich.

One challenge for airlines, mining profitability aside, is that businesses aren't necessarily signing up for the kind of long-term corporate travel deals used in the past. Many employees prefer to book their own travel, and it's hard to justify paying a corporate travel provider if Jim from sales can find a cheaper fare with three seconds of Google searching.

So we might not be able to rely on business bucks funding fancier flying for everyone long term. However, right now it's still a key income source for major carriers, and we'll all be screwed if one of them goes broke. So let's hope we don't see a similar decline in the next seven years.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on finder.com.au.

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