Work from home is killing business-class travel, experts say
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The airline industry has recovered to near pre-pandemic levels of operation, due in large part to tourism resulting from a global easing of COVID-19 travel restrictions and the eagerness of people to escape the walls they’ve been staring at since 2020. One group yet to join in the rush to airports are business travelers, according to a new report from the Associated Press’ David Koenig, who spoke to industry groups and airline executives about the relatively slim amount of non-recreational travel being booked by large companies in 2022.
Individuals flying for business tend to make up a large amount of airlines’ revenue in fall as summer travel cools off and children return to school, but industry experts maintain that business travel sales remain between 25 and 30 percent below pre-pandemic levels. OAG travel analyst John Grant told the Associated Press that this group’s habits remain central to airlines’ bottom lines in non-peak travel windows.
“The whole challenge for industry is around the return of the corporate traveler, and whether he is going to come back in enough volume and frequency that is going to help these airlines,” Grant told Koenig.
The Global Business Travel Association (GBTA) projected in August that corporate travel as seen in pre-pandemic years will not fully return until 2026, citing a deterioration of macroeconomic conditions at the start of 2022 “impacting the timing, trajectory, and pace of business travel’s recovery, both globally and by region.” Why fly across the country when you can meet face-to-face over Zoom? The economic downturn which saw global stock exchanges nosedive and gas prices soar prompted the group to shift its predictions of a full recovery for business travel from 2024 to 2026.
“To understand the headwinds that have been impacting a more accelerated recovery for global business travel, all you have to do is look at the news headlines since the beginning of 2022,” said GBTA CEO Suzanne Neufang at the group’s 2022 convention in San Diego. “The forecasted result is we’ll get close, but we won’t reach and exceed 2019’s pre-pandemic levels until 2026.”
The group’s 2022 Business Travel Index Outlook describes new trends taking shape for travelers moving forward, including the rise of remote work and “bleisure” travel—blended business and leisure traveling—as obstacles preventing the return of corporate airfare sales to their pre-pandemic level of $1.4 trillion per year. The unevenness in return to office initiatives from business to business has kept some companies from loosening the purse strings for employee travel, according to Chuck Thackston, a data researcher at Airlines Reporting Corp.
“On the corporate side, it just stakes a little more to restart that because there are so many moving parts,” Thackston told Koenig. “If you want to go visit clients in New York, it could be that nobody is in the office in New York. That is slowly building back.”
Large companies have been slowest to return to the office and to the air en masse, according to Southwest Airlines Chief Commercial Officer Andrew Watterson.
“Our largest corporates are the ones that are lagging,” Watterson told Koenig. “Particularly banking, consulting and technology.”
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