As summer vacations slowly come to an end, airlines are counting on the return of more business travellers to keep their pandemic recovery going into the fall and winter seasons.
What does this mean for non-business travellers?
As many airlines and governments are in debt as a result of the pandemic as well as rising inflation rates, the reliance on business travellers for airline recovery, the hike in airfares for both business and first class is set to increase.
Air travel in the United States, boosted by huge numbers of tourists, has nearly recovered to pre-pandemic levels as many people travelled in and out of the USA.
As for people travelling within Europe that fly with low-cost budget airlines such as Ryanair and Iberia, passengers flying with these airlines are expected to still experience delays in the upcoming months as a result of staff shortages.
Business travel is slower to return due to how efficient remote work has prompted faster communication and an ability to connect with people in different time zones without suffering from jetlag.
It is more complicated than somebody deciding they want to take a vacation after staying home during the first two years of the pandemic, says Chuck Thackston, who leads data research at the Airlines Reporting Corp., a ticket-settlement firm that operates as a middleman between airlines and travel agents.
Business travel, however, remains about 25% to 30% below 2019 levels, according to airlines and outlets that track airfare sales. The Global Business Travel Association recently predicted that corporate travel won’t fully return until mid-2026, which is 18 months later than the trade group had previously forecast.
Business travellers generally pay higher airfares, so their absence has a major impact on airline revenue and profit.
Business travel is big business worldwide, both in the hospitality and aviation industries. The Global Business Travel Association estimates that it was worth more than $1.4 trillion in 2019, then plummeted by more than half each of the next two years. The trade group estimates that after being hindered by the omicron variant early this year, business travel will hit $933 billion in 2022 — still 35% below the pre-pandemic mark.
The cost of travel overall is expected to keep rising, putting pressure on corporate budgets. A recent report from travel-management company CWT predicted that fares paid by business travellers will rise nearly 50% this year and 8% next year, and hotel rates will rise 19% this year and 8% in 2023.
Is it necessary for companies to always fly business class? Let us know your thoughts in the comments.
