At the recent Apr-2021 edition of CAPA Live, Cranky Flier president and chief airline dork Brett Snyder even stated that estimates of a permanent 15% to 20% drop in business travel following the coronavirus pandemic "just sounds like an educated guess".
It could be more, it could be less. Mr Snyder was quite right when he said, "we really don't know what will happen". He predicted there will "definitely" be pent up demand for events such as conferences and conventions, but added: "We don't really know what the dynamic is going to look like". Those views are probably echoed across the corporate travel sector right now as it comes to terms with longevity of the COVID-19 fuelled restrictions that continue to limit international travel.
There is an optimistic feel right now though as vaccination programmes and increased testing capabilities help in the fight against infection. This is particularly evident in the US, which is ahead of the curve with vaccinating its population. Delta Air Lines has reported a "slow but steady" recovery in corporate travel.
Speaking to investors and analysts on an earnings call its president Glen Hauenstein acknowledged that as at Mar-2021 corporate travel levels were about one fifth of what they were pre-pandemic, but encouragingly that was an improvement of five percentage points from where they were at the end of 2020.
The carrier's most recent survey of its corporate customers showed that about a third of them planned to increase travel volumes in the current 2Q, and the majority plan for their employees to return to offices in 2H. "We anticipate the significant increases will occur after Labor Day as we enter the more traditional business travel season," he said.
Mr Hauenstein said recent demand trends are "encouraging" due to vaccination rates, with current domestic leisure bookings now around 85% recovered to 2019 levels. This positivity suggests Delta will return "significant sequential improvement" in revenue in the Jun-2021 quarter "as leisure demand accelerates into the peak summer period". Business travel will follow as "vaccinations become even more widespread and offices continue to reopen".
Fellow US carrier Southwest Airlines is also experiencing improvements in leisure passenger demand and bookings for Apr-2021 and May-2021 travel, with expectations of improving passenger traffic and fares compared with Mar-2021.
It also continues to experience an increase in bookings farther out on the booking curve, with approximately 35% and 20% of anticipated bookings currently in place for Jun-2021 and Jul-2021 respectively. But, the airline acknowledges that business travel continues to "significantly lag" leisure, which is expected to have a significant negative impact on close in demand and average passenger fares.
United Airlines remains committed to a commitment to remove USD2 billion in structural costs, but is gearing up for the rise of business travel. It is planning "continued investment" in customers, including continuing the United Polaris retrofit programme and starting retrofit on narrowbody aircraft, modernising gates and upgrading and expanding United Club locations in Newark and Denver.
The airline's CEO Scott Kirby, speaking at the Mar-2021 edition of CAPA Live, had stated he expected corporate travel and international travel to recover. Mr Kirby said: "Once borders come down, international travel's going to come back, I think, even stronger than domestic". He also commented: "Business travel is not transactional, it's about relationships", adding: "Human nature does not change".
Travel still looks very different, not just in scale, but also in its basic dynamics. IATA data for bookings made before 20-Mar-2021 for the period between May-2021 and Sep-2021 showed that in North America 80% of total bookings are to destinations within the region, this compares to 61% at 20-Mar-2019. Similarly, in South and Central America 40% of bookings are for travel within the region, compared to 29% in 2019.
IATA forecasts airlines will respond to this regionalisation of demand by redrawing their networks, with long haul passenger services in most regions likely to be limited due to the continued absence of business travellers. This is particularly hitting one of the traditionally busiest markets: the trans-Atlantic.
Virgin Atlantic CEO Shai Weiss followed the established guestimate when he said corporate travel will see a reduction of 20% compared to pre-pandemic levels for 2021 and 2022 in an interview with The Financial Times. Michael O'Leary, CEO, Ryanair Group, is more optimistic with expectations for corporate travel coronavirus recovery by 2022, noting "All of these predictions business travel is dead... they generally always prove to be wrong".
The Irishman's words are certainly easier to say when running an airline without a dedicated business class cabin and only serving short-haul markets, and many disagree. Andrew Murphy, director aviation at Transport & Environment (T&E), the European advocacy group promoting EU and global sustainable development policies for the transportation sector, said the new normal produced by the coronavirus pandemic will result in "less flying, especially corporate travel, and the industry must adjust".
How much adjustment is not clear, but the environmental debate will certainly influence strategies. France's National Assembly voted in Apr-2021 in support of legislation to cut carbon emissions by 40% by 2030, against a 1990 baseline, including a ban on short haul domestic flights on routes than can be covered by train in under 150 minutes. This measure could halt the majority of short haul domestic flights to Paris Orly, Bordeaux, Lyon and Nantes, with services to Marseille also at risk.
Recent insight from some of Europe's leading banks may also bring some unsettling shockwaves to the cautious optimism of business travel recovery. In a report published by The Financial Times, Dutch bank ABN Amro said it plans to halve its air travel compared with 2017 over the next five years, in part by banning bankers from taking flights between its European offices and forcing them to take the train.
It is not alone. The Financial Times reports that Lloyds Banking Group has pledged to sustain the momentum built during the pandemic by keeping carbon-dioxide emissions from travel to less than 50% of 2019 levels, Standard Chartered expects movements to be about a third lower than before the pandemic, while HSBC's CEO Noel Quin, told the newspaper that he expected to reduce his own travel by about half.
Only time will tell, how much business travel we will lose due to the COVID-19 pandemic, but certainly more sustainable strategies to limit our environmental impact will mean we may never actually have a number!