Airlines anxiously await road warrior return to office and air

Bloomberg

Two years into the pandemic and the airline industry remains on standby for the return of business travelers.
Expectations that expense account-wielding road warriors would follow on the heels of leisure travelers have yet to materialize, and the outlook remains hazy with the spread of the latest coronavirus variant. That’s kept carriers’ profits in check and raised questions over whether the change is just a cyclical blip or a structural deviation.
Southwest Airlines Co.’s top executive rued the slow rebound in business travel in an earnings call and hinted the pace of recovery may continue to be slower than some industry veterans anticipated a year ago.
“I thought we would have this pandemic beat and far behind us, and it’s far from that,” Chief Executive Officer Gary Kelly told analysts and reporters. He said the lingering impact of the pandemic will likely mean fewer business passengers for a longer span. “We’re going to have to be more heavily dependent on consumer travel than we were before.”
Business travel is critical to large airlines, who rely on those flyers to fill premium-class seats and pay higher fares for trips booked on short notice. Airlines for America, the lobbying group for the biggest US carriers, says weekly tickets sold for corporate travel remain 63% below pre-pandemic levels. The US Travel Association forecasts that US business travel spending and the number of trips won’t top 2019 levels until 2024.
American Airlines Group Inc. expects a return of business demand — but is hedging its bets.
“As we’re developing our plans and forecast for this year, we’re working to build an airline that can be profitable even without the full return of managed corporate travel,” CEO Robert Isom said on a conference call earlier this month, referring to large accounts where trips are booked by an outside vendor.
Companies have been slow to resume business trips as their return-to-office plans are pushed back and employees have come to rely on — and even embrace — video conferences instead of face-to-face meetings. That’s raised anew the question of whether corporate America will resume its old ways or retain the cost and time savings.