Business travel recovery stalls as companies seek to cut costs and emissions
The recovery in business travel has stalled this year amid record price rises for premium flights and growing pressure on big companies to cut their carbon emissions. Europe’s three major airline groups reported a drop in the rate of recovery in corporate travel in their most recent earnings, while bookings at US airlines have flatlined over the past year. According to data from the Global Business Travel Association and CWT, a business travel and meetings company, the average premium-class air fare has risen from $3,666 in 2019 to $4,395 this year. Recent price rises are the highest on record, they said. Robin Hayes, CE of JetBlue, said in the US airline’s results call this month that the industry was now operating “in a world where business travel may not be coming back”. British Airways owner IAG, Air France-KLM and Lufthansa said bookings from corporate customers were between 60 and 70% of pre-pandemic levels in Q2, a decline from the first three months of the year, according to calculations from analysts at Bernstein. IAG CE Luis Gallego told analysts that “things are not improving recently” for corporate travel, and that booking volumes have “plateaued”, although he highlighted signs of a stronger second half of the year. The bosses of Air France-KLM and Lufthansa, meanwhile, said they had written off a full recovery in domestic business travel, with Air France cutting capacity on some routes in response. Across the Atlantic, the post-pandemic recovery has typically outpaced Europe, but business travel bookings at US airlines have stagnated at 75% of 2019 levels since spring 2022, according to analysts at Melius Research. Paul Abbott, CE of American Express Global Business Travel, said multinational companies had been slower to bring back business travel than small- and medium-sized companies, where demand has recovered to 86% of 2019 levels, compared to 70% for larger corporates. His company has increased its focus on SMEs and reported record revenues in its most recent quarter.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-08-14/general/business-travel-recovery-stalls-as-companies-seek-to-cut-costs-and-emissions
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Business travel recovery stalls as companies seek to cut costs and emissions
The recovery in business travel has stalled this year amid record price rises for premium flights and growing pressure on big companies to cut their carbon emissions. Europe’s three major airline groups reported a drop in the rate of recovery in corporate travel in their most recent earnings, while bookings at US airlines have flatlined over the past year. According to data from the Global Business Travel Association and CWT, a business travel and meetings company, the average premium-class air fare has risen from $3,666 in 2019 to $4,395 this year. Recent price rises are the highest on record, they said. Robin Hayes, CE of JetBlue, said in the US airline’s results call this month that the industry was now operating “in a world where business travel may not be coming back”. British Airways owner IAG, Air France-KLM and Lufthansa said bookings from corporate customers were between 60 and 70% of pre-pandemic levels in Q2, a decline from the first three months of the year, according to calculations from analysts at Bernstein. IAG CE Luis Gallego told analysts that “things are not improving recently” for corporate travel, and that booking volumes have “plateaued”, although he highlighted signs of a stronger second half of the year. The bosses of Air France-KLM and Lufthansa, meanwhile, said they had written off a full recovery in domestic business travel, with Air France cutting capacity on some routes in response. Across the Atlantic, the post-pandemic recovery has typically outpaced Europe, but business travel bookings at US airlines have stagnated at 75% of 2019 levels since spring 2022, according to analysts at Melius Research. Paul Abbott, CE of American Express Global Business Travel, said multinational companies had been slower to bring back business travel than small- and medium-sized companies, where demand has recovered to 86% of 2019 levels, compared to 70% for larger corporates. His company has increased its focus on SMEs and reported record revenues in its most recent quarter.<br/>
