Will business air travel ever return to its pre-Covid heights?

“My pre­dic­tion would be that over 50% of busi­ness trav­el… will go away, now that it’s not the gold stan­dard,” Bill Gates told a New York Times con­fer­ence in Novem­ber 2020. In light of the pan­dem­ic expe­ri­ence, he argued, “it will be a very high thresh­old to do that busi­ness trip”. 

By then, remote work­ing had proved its worth: col­lab­o­ra­tion tools could keep a busi­ness run­ning smooth­ly at a dis­tance. Add to that the grow­ing aware­ness of the high envi­ron­men­tal cost of trav­el­ling by air. A year ear­li­er, envi­ron­men­tal­ist Gre­ta Thun­berg pop­u­larised the term fly­gskam or ‘flight shame’, prompt­ing a back­lash against fre­quent fly­ers. 

Many agreed that these pres­sures spelt the end of the road for busi­ness trav­el. In a Bloomberg sur­vey pub­lished in August last year, 84% of large com­pa­nies said they were plan­ning to spend less on trav­el after the lock­downs. Anoth­er sur­vey found that most cor­po­rate trav­el buy­ers sup­port­ed man­dat­ing few­er trips for the sake of the plan­et. 

But, two years lat­er, busi­ness trav­ellers seem to be tak­ing to the skies once again. Glob­al com­mer­cial flight book­ings exceed­ed 2019 lev­els in March this year, with the return to office work­ing as a sig­nif­i­cant dri­ver, accord­ing to data from the Mas­ter­card Eco­nom­ics Insti­tute. By the end of April, book­ings were up near­ly 12% and ana­lysts say the trend is con­tin­u­ing. 

“Peo­ple are keen to get out on the road again and drum up busi­ness,” says Mark Hol­ly­head, pres­i­dent at Egen­cia, a cor­po­rate trav­el plat­form. “More and more peo­ple want to get togeth­er. We’ve seen a recov­ery to 75% to 80% of pre-Covid vol­umes.”

Michael Riegel, gen­er­al man­ag­er at trav­el man­age­ment com­pa­ny Tri­pActions, says book­ings from large com­pa­nies are up 24% this quar­ter com­pared with the same peri­od in 2019. “If it was the result of pent-up demand after the lock­downs, it would have last­ed just a cou­ple of months. But there has been a steady increase and we don’t see signs of it slow­ing down.”

He points to trav­el pat­terns that are emerg­ing because of remote work­ing. Work-from-any­where poli­cies have led to ’bleisure’ trips and team mem­bers liv­ing in dif­fer­ent coun­tries or even con­ti­nents. “Con­nect­ing dis­trib­uted remote work­ing teams is, at the moment, the num­ber-one rea­son for busi­ness trav­el,” Riegel says. “Rough­ly 26% of our book­ings are for team vis­its, a need to be on site and so on.”

Pri­vate jet firms also report a boost in cor­po­rate busi­ness, part­ly over con­cerns about the pos­si­bil­i­ty of con­tract­ing Covid on packed com­mer­cial flights. “Demand for pri­vate jets was so high this sum­mer that it out­stripped the num­ber of air­craft glob­al­ly avail­able to fly,” says David Doughty, CEO of Admi­ral Jet. Anoth­er com­pa­ny says its clients are fly­ing 40% more than before the pan­dem­ic. 

None of which is good for sus­tain­abil­i­ty. “Pri­vate jets are an impor­tant issue because the impact on the envi­ron­ment is dis­pro­por­tion­ate to the small num­ber of peo­ple fly­ing,” says Erin Vera of Trans­port & Envi­ron­ment (T&E), an NGO that cam­paigns for eco-friend­ly trans­port. “They are 50 times more pol­lut­ing than trains and five to 14 times more than com­mer­cial planes.”

Corporate ‘flight shame’

Ear­li­er this year, T&E launched a cam­paign call­ing for an over­all 50% reduc­tion in busi­ness flights by 2025 – say­ing that the pan­dem­ic has shown such a dra­mat­ic cut is pos­si­ble. If achieved, it would be the equiv­a­lent of tak­ing 16 mil­lion cars off the road. It’s also vital to “accel­er­ate sus­tain­able avi­a­tion” by putting pres­sure on air­lines to clean up their oper­a­tions, Vera says. Although only 30% of air trav­el in Europe is for busi­ness, it can make up as much as three-quar­ters of an airline’s rev­enues on cer­tain routes.

As part of the push, T&E ranked 230 glob­al com­pa­nies on their pub­lic pledges to reduce the impact of busi­ness air trav­el. The worst – includ­ing Anheuser-Busch InBev, Accen­ture and Microsoft – nei­ther report on their trav­el emis­sions nor have spe­cif­ic tar­gets to lim­it them. But sev­er­al have made ambi­tious com­mit­ments.

Among them is Novo Nordisk, which received the NGO’s high­est rat­ing. The Dan­ish phar­ma­ceu­ti­cal multi­na­tion­al aims to cut its car­bon emis­sions from air trav­el by 50% of its 2019 rates, by 2025, which would rep­re­sent a sav­ing of more than 31,000 tonnes of CO₂-equiv­a­lent gas­es. 

Dorethe Nielsen, vice-pres­i­dent at Novo Nordisk, says that every busi­ness unit now has KPIs to reduce trav­el. “We will still trav­el for impor­tant busi­ness oppor­tu­ni­ties, but we are on track to deliv­er for 2025,” she adds. “Before the pan­dem­ic, we were – as every­one else was – fly­ing for inter­nal and exter­nal meet­ings. Now, we have changed how we work and how we have our meet­ings. It is clear to every­one that we have great dig­i­tal alter­na­tives to fly­ing.”

But busi­ness­es can­not always avoid trav­el. One option is to encour­age staff to choose plan­et-friend­ly modes. Klar­na, the Swedish buy now, pay lat­er giant, has banned its employ­ees from fly­ing with­in Europe if a train option is avail­able. Sim­i­lar poli­cies are in place at BBC World­wide, the Greater Lon­don Author­i­ty and sev­er­al uni­ver­si­ties.

Bob Bailkos­ki, CEO of tech­nol­o­gy ser­vice provider Log­i­calis, says before the pan­dem­ic its 7,000 staff “were always per­haps a bit too eager to jump on a flight”. As part of a push for sus­tain­abil­i­ty across its oper­a­tions, he recent­ly decid­ed to ”lead by exam­ple” by trav­el­ling by train from Lon­don to Cologne for a meet­ing.

We have changed how we work and how we have our meet­ings. It is clear to every­one that we have great dig­i­tal alter­na­tives to fly­ing

“I want­ed to under­stand for myself some of the per­cep­tions that I had about train trav­el – too long, more expen­sive, not being able to sit down – were they just myths?” he says. “I was real­ly pleased to find out that yes, the jour­ney took a bit longer but I was able to be pro­duc­tive on the whole of it.”

He thinks cus­tomers and staff are now aware of the issue and are well-used to dig­i­tal col­lab­o­ra­tion tools. “Fly­ing should be the last step in the thought process.”

Hol­ly­head says Egen­cia has seen a 30% increase in the num­ber of sus­tain­abil­i­ty ques­tions includ­ed in RFPs from its clients. Dur­ing the pan­dem­ic, the com­pa­ny added a car­bon cal­cu­la­tor to its plat­form so that users might eas­i­ly com­pare the impact of dif­fer­ent routes and modes. This adds what he calls “visu­al guilt” to the book­ing process, nudg­ing users to think twice before book­ing.

Gathering headwinds

But flight shame may not be the busi­ness trav­el industry’s biggest headache at present. A recent report from the Glob­al Busi­ness Trav­el Asso­ci­a­tion esti­mates that the $1.4tn (£1.23tn) sec­tor will not recov­er ful­ly until 2026, thanks to head­winds such as infla­tion, high ener­gy prices, sup­ply chain issues and labour short­ages. Even Google has cracked down on employ­ee trips in a bid to cut costs.

John Grant, chief ana­lyst at glob­al trav­el data provider OAG, says the out­look in the air indus­try is gloomy. “Air­lines were hop­ing, indeed pray­ing, for the return of the cor­po­rate road war­rior for busi­ness to the [end of 2022] and it just doesn’t seem to be hap­pen­ing.”

Air­lines are now plan­ning to oper­ate just 87% of their 2019 capac­i­ty this win­ter. While that’s an improve­ment on last year, “any sign of a sig­nif­i­cant Covid out­break and that num­ber could fall fur­ther”, Grant warns.

The industry’s wafer-thin mar­gins mean car­ri­ers are cut­ting back on capac­i­ty or pass­ing on the soar­ing cost of jet fuel to pas­sen­gers. “The absolute rev­enue that [air­lines] are get­ting from cor­po­rate trav­ellers might be about the same because the cost of the air­fare is 25% to 40% more than it has been in the past. But the actu­al vol­umes of peo­ple fly­ing are less than in 2019 for sure,” he says.

Are those herald­ing the return of busi­ness trav­el wrong? They may be suf­fer­ing from a case of “emperor’s new clothes”, Grant says. “We’d like to believe it is [bounc­ing back], but it isn’t, and it’s cer­tain­ly not com­ing.”

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