Regional economies are rallying, stocks are booming and the initial public offering pipeline is flowing. But bankers are still stuck at the back of the plane in economy class. 'I have to pay to upgrade to business class because my company only offers an economy-class package,' lamented an executive at a European investment bank. 'I don't think there will be any changes until at least the yearend, as they want to keep cautious cost-control measures in order to maintain profitability.' Aside from flight costs, travel allowances, luxury hotel reservations and even client dinners have all been scaled back as companies grapple with shrinking balance sheets. 'The cut-backs have been more serious than in the [Asian] financial crisis in 1997,' said Connie Leung, the Hong Kong business leader for information product solutions at Mercer. 'This time, every country is affected because it's a global crisis, so the cost-cutting is more common, no matter if it is a local or multinational company.' The financial sector scrambled to shore up capital last year in order to stay afloat during the worst financial downturn since the Depression. Even though the global economy has shown signs of recovery, companies are treading softly and have rewritten internal policies to cut down on discretionary costs. As a result, there has been a 27.4 per cent decline so far this year in premium-ticket passengers travelling within the Far East compared with a year ago, according to a report last month from the International Air Transport Association. The number of outbound premium-class passengers going from Asia to Europe and the Middle East has fallen 22.8 per cent and 14.1 per cent, respectively, in the same period. Contributing to the drop-off are higher thresholds at most banks to qualify for business-class upgrades. One fund manager at an American investment firm said flight times must now be longer than five hours. Supervisors were previously willing to grant upgrades for shorter trips and in a more informal manner, he said. Ms Leung said that tightening up approval processes for discretionary requests was one way companies were trying to cut costs. Controlling the process more closely might deter staff from trying to take advantage of the company, she said. A banker at another European investment bank said that her colleagues had been willing to co-operate in the cost-cutting process. She gave the example of staff using landlines while on business trips to avoid mobile roaming charges. In other cases, banks have turned to technology advances to cut down on travelling altogether. Videoconferencing systems, for example, are in greater demand, since they can facilitate real-time meetings that connect multiple boardrooms across the region without the need for travel. But banks are unlikely to cut costs on travel that could be used to build key relationships with clients, since that is the lifeblood of the business. 'In some vocations, a face-to-face discussion is essential,' Ms Leung said. 'But companies will try to define which events need face-to-face contact, and some may not be essential. So they may try to cut down.' Many companies said they were now making use of videoconferencing to host internal meetings, and a source within a US investment bank said the bank had tried to save costs by hosting some of its mid-sized client events within its own office rather than at expensive hotels. But while banks have tightened up their internal entertainment and travelling costs across the board, core employee benefits such as health care and retirement plans are unlikely to be touched. 'Cutting down on other employee benefits may create noise from employees, and companies would need to think that through very carefully,' Ms Leung said. 'Also, they still need to offer competitive employee benefits, so they would not make such cuts unless their situation is critical.'