Larry Dignan
for Between the Lines
| July 22, 2021 — 15:13 GMT (16:13 BST)
| Topic: Collaboration
Gauging business travel as office reopen is worth examining because it highlights where corporate dollars are actually going and whether video conferencing can lead to a permanently lower level of corporate plane hopping.
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Here’s a look at the state of business travel.
American Airlines President Robert Isom:
Business travel has started to return in a meaningful way. Domestic business revenue has — was approximately [20%] of 2019 levels in March, but it more than doubled to approximately 45% in June, with revenue from small- and medium-sized businesses recovering at a faster pace than large corporate accounts. Looking forward, we expect business recovery to continue and accelerate. In the coming months, our share of bookings in key business channels remains ahead of 2019. And customers are telling us that they’re eager to travel, and some of our largest corporate accounts have already lifted all travel restrictions and many have already returned to the office.
We now expect a full business travel recovery in 2022. We still expect the international travel, particularly long-haul international travel, to be slower to fully return.
United Airlines’ Andrew Nocella, chief commercial officer:
Business travel, which was down over 90% versus 2019 for most of Q2, has inflected sharply in June and is currently down about 60% versus prepandemic levels. We expect 2 more inflection points for in-business demand first at the end of the summer and second, the new budget cycle beginning in January. We expect business demand to improve by the end of the third quarter to be down about 40% to 45% versus 2019. Our recent survey of business customers now indicates over 90% plan to return to travel, including international travel, in the second half of ’21. That is up from around 55% earlier this year.
We’ve already seen our advanced business bookings for September are now only down, I think, about 50%. And we expect that number to continue to get better and finish the month at around 40% to 45% down based on where we are right now.
Glen Hauenstein, president of Delta Air Lines:
Corporate travel volumes accelerated in May and June with almost 95% of our accounts booked in travel in the month of June. We’re also beginning to see a return of consulting and sales-related travel and higher volumes in traditionally business-heavy markets like New York City and Boston. Our recent corporate survey results show that over 90% of our corporate accounts anticipate travel volumes to increase in the September quarter, up from just 33% in the March quarter. In addition to these survey results, our close engagement with customers give us increased confidence of the acceleration of business travel, especially as we move towards the post Labor Day period as schools and offices continue to reopen.
We expect domestic corporate volumes will recover between 55% and 60% of 2019 levels by the end of the September quarter, up from 40% at the end of the June quarter. Despite volatility in global COVID recovery trends, international travel is accelerating, with capacity and load factors increasing as we head into the fall.
Delta CEO Ed Bastian said:
Around the country, more and more offices are opening, and people are reconnecting to their businesses and to each other. With 72% of our employees vaccinated, we officially reopened our own offices last month in June. And as I interact with other CEOs, I’m encouraged to hear about their own plans to accelerate their return to office. That sentiment is coming through loud and clear in our most recent corporate survey, with almost 95% of our accounts indicating they’ll be returning to their offices by the end of this year.
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Larry Dignan
for Between the Lines
| July 22, 2021 — 15:13 GMT (16:13 BST)
| Topic: Collaboration