Southwest CEO Gary Kelly said in the airline’s second quarter earnings release that “business revenues continue to lag leisure revenue trends; however, we are encouraged by the improvement in business revenues in second quarter 2021.” Kelly added that Southwest continues to see “steady weekly improvements in business bookings” in July 2021. With most of the large airlines reporting earnings, a few key themes have emerged.
Sales and consulting travel have picked up. There will be a 4- to 6-week lag between business travel and full office reopenings.It’s unclear how hybrid work affects travel. And it’s more unclear what business travel looks like once pent-up demand is cleared. Some airlines are betting on a full business travel rebound in 2022. At least one airline is betting on a full business travel recovery-based demand from industries such as finance, insurance, consulting and accounting. Businesses are paying similar fares to what they paid pre-COVID-19.
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:
United Airlines’ Andrew Nocella, chief commercial officer:
Glen Hauenstein, president of Delta Air Lines:
Delta CEO Ed Bastian said:
More on travel: 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. 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. 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.
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