• Wed. Oct 5th, 2022

Business class travel helps airline sales take off post-pandemic | Air industry

ByKimberly A. Brochu

May 6, 2022

He was declared moribund, if not condemned, just over a year ago. But now, is business class air travel picking up again? British Airways owner IAG, anticipating a return to profits this year, said a strong recovery in business bookings was behind the recovery.

In a world where half the city can no longer bother to take the northern line back to the office, and where bankers regret the cost of a train from Surrey, how can the airlines claim to achieve this ?

There are a few things to note. First, not all premium seats are necessarily occupied by passengers traveling solely for work. Many holiday companies, from travel giant TUI to BA itself, have reported that wealthier customers, who continue to earn and in some cases rack up big savings while being forced to stay home during the pandemic, are now blowing much harder on holidays – even as the cost of living crisis hits hard.

But work trips are also returning. The biggest multinational companies may have adopted Zoom for many internal meetings, with long-lasting effects for airlines. Most assume that there will be far fewer such thefts simply for, say, a European managing director to come into contact with a boss at a US global headquarters.

However, many small and medium-sized businesses say they cannot do business this way, especially to win new customers or close contracts. This is not necessarily to IAG’s advantage, with jumbo jets and business class cabins: on short-haul, easyJet claims to upstage small and medium-sized enterprises (SMEs) whose budgets can be ever tighter.

BA boss Sean Doyle confirms that SMEs were the first to return, but bigger companies are now reserving, with banking and finance leading the charge skyward. Accountancy and consulting are following closely behind and sectors such as IT and pharmaceuticals are coming back.

Speaking as owner IAG announced its quarterly results, Doyle said commercial traffic was 2.5 times higher in March than it was in January, and is now back at 65%. to 70% of 2019 levels. Lucrative transatlantic routes remain in focus, with bookings coming from both ends – still led by leisure, but for business “momentum is building”.

There are still clear obstacles to a full recovery: strict Covid entry policies deter or prohibit flights to some key Asian business destinations, particularly China, Hong Kong and Japan. The climate crisis is pushing companies to improve their environmental credentials, and limiting their own air travel is an obvious way to reduce their carbon footprint.

But conferences are returning to the “real world” rather than online, and many employees will despair of seeing the world after being locked down for two years. Arguably, the pandemic has made business travel more feasible: remote working has proven that staff don’t need to be in the office to be productive. Rather than simply returning home after a busy schedule, staff can complete more normal tasks while staying longer abroad, which is potentially more enjoyable for the company and the business traveler.

Good news for BA, so bad for passengers upgrading their holidays – the front of the cabin, says Doyle, looks more and more like 2019.