Deloitte Predicts Cautious Recovery in Business Air Travel

 - August 3, 2021, 6:19 AM
U.S. carriers like American Airlines should start selling more tickets to business travelers in the second half of 2021, according to Deloitte. (Image: American Airlines)

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.

After more than a year of canceled in-person meetings, conferences and trade shows, and closed workspaces, Deloitte sees business air travel by employees of U.S. corporations bouncing back in the second half of this year. However, in a report published on Tuesday, the consultancy group said traffic levels will remain well below pre-Covid pandemic levels until the end of 2022, due largely to lingering uncertainty and concerns surrounding the virus as new waves of infection continue to spread globally.

The report—­titled "Return to a world transformed: How the pandemic is reshaping corporate travel"—acknowledged that while domestic leisure travel has “taken off” in the U.S., business travel faces “a slower return” due to a “more complex set of considerations.”

Deloitte’s report draws on a survey, conducted between May 28 and June 20, of 150 travel managers and executives with travel budget oversights for U.S. corporations. The company said it also interviewed executives at U.S. companies whose 2019 air travel expenditure averaged $123 million.

“Companies find it difficult to ask employees to travel, and many of their clients, vendors, and partners have yet to open their doors to employees, let alone visitors,” said the report.

It described this situation as “temporary”, however, as businesses will gradually be persuaded to increase their travel spend and in-person “interaction with customers” when competition heats up and growth opportunities increase.

“While the eventual scale and shape of the pre-pandemic staples of corporate life are unclear, they are returning,” the report said. “Many companies plan to significantly accelerate their return to offices following Labor Day [September 6], and an uptick in corporate travel is expected to follow,” it added.

This development is expected to provide a “boost” to domestic business travel in the fourth quarter, “especially if it is accompanied by sustained improvement in vaccination and infection rates within the U.S.,” it noted.

However, the Deloitte team sees international travel will remain depressed until borders fully reopen and Covid travel restrictions, such as quarantines and complex requirements to prove vaccination status, are eased. The timing of this sector’s recovery is uncertain due to the “unpredictable and uneven nature of the pandemic across countries and regions.”

As travel returns, the report noted, there will be an added focus on “cost containment” and a corporate commitment to reduce carbon emissions, which will impact the volume of travel. 

Nearly 80 percent of the companies surveyed said they now operate under an obligation to lower their environmental footprint “or are working toward a pledge to do so,” according to Deloitte. To curb travel-related emissions, companies “will draw on lessons learned during the pandemic to limit trip frequency," it added. The top ways companies plan to improve their sustainable travel profiles are by holding internal meetings online and arranging meeting agendas to reduce the need to fly.

“The changes adopted, and lessons learned during the pandemic, combined with progress toward sustainability commitments, are creating a new normal for corporate travel,” said Anthony Jackson, Deloitte's principal for transactions and business analytics and U.S. airlines leader. “However, the importance of in-person interaction for business success is clear, creating opportunities for the airline industry to continue to attract and serve business travelers.”