WFH is blamed for stunting airlines’ comeback: business travel remains 35% behind pre-pandemic heights
- Experts have blamed work from home options for corporate air travel’s struggle returning to its pre-pandemic levels
- Though standard air travel has nearly returned to its 2019 volumes, data shows corporate travel in 2022 remains 35% less than what it was before the pandemic
- Still empty offices have deterred businesses from spending on travel, while in-person stalwarts like conventions increasingly offer remote options
- As inflation continues to soar across 2022 companies that have gotten used to shrunken travel costs continue to slash budgets
Work from home accommodations have been blamed for hampering airlines’ comeback as business air travel remains about 35% behind its pre-pandemic heyday.
Though air travel within the US has nearly returned to its 2019 levels, data from the Global Business Travel Association shows corporate travel in 2022 was worth $933 billion – down from $1.4 trillion in 2019.
The Global Business Travel Association also forecast corporate travel wouldn’t return to pre-pandemic levels until 2026, 18 months later than the group previously predicted, according to the Boston Globe.
The driving force behind the delay was work from home options keeping offices empty, and even in-person stalwarts like conventions increasingly offering remote options for attendees.
Experts also noted corporate travel was lagging because while it was easy for people to pick up their bags and begin flying for leisure, it takes time for the corporate infrastructure to get its wheels moving again.
‘On the corporate side, it just takes a little more to restart that because there are so many moving parts,’ Chuck Thackston, lead data researcher at Airlines Reporting Corp., told the Globe, ‘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.’
The normalizing of video calls and remote interaction during the pandemic has left many companies comfortable with their reduced travel budgets, which many are happy to continue cutting amidst ongoing inflation.
Experts have blamed work from home options for corporate air travel’s struggle returning to its pre-pandemic levels
Airlines say what corporate air travel has returned is largely coming from small business, with larger companies still not returning to the skies.
Andrew Watterson, chief commercial officer for Southwest Airlines, said business travel began picking back up in the spring.
‘It was skewed toward smaller businesses and government and education were traveling,’ Watterson told the Globe, ‘Our largest corporates are the ones that are lagging, particularly banking, consulting and technology.’
The chief commercial officer for American Airlines, Vasu Raja, said one-day business trips had dropped, but trips carried over across a weekend have seen an uptick.
‘Interestingly, we’ve seen more demand for blended trips where somebody leaves on a Thursday from Dallas to go to New York, they don’t return on the Friday,’ he said, ‘They stay through the weekend and they come back on Sunday.’
Raja noted spouses often accompany the traveler on those trips.
Though standard air travel has nearly returned to its 2019 volumes, data shows corporate travel in 2022 remains 35% less than what it was before the pandemic
Still empty offices have deterred businesses from spending on travel, while in-person stalwarts like conventions increasingly offer remote options
United and American Airlines both saw profits – excluding government aid – in the second quarter of 2022, and expect to make similar reports for the third.
But soaring inflation could throw a wrench in those hopeful numbers as ticket prices and associated travel costs have soared over the summer and are expected to continue climbing next year.
According to the travel management company CWT, ticket prices for business travel will have risen 50% by the end of 2022 and could climb another 8% next year. Hotel rates will have also jumped 19% this year, and will continue up 8% in 2023.