Analysis: Airlines reboot as COVID sparks a revolution in one-day business trips

  • The most popular airline routes have changed since 2019 – OAG
  • Higher airfares offset the drop in travel
  • Environmental concerns are a factor for some companies

SYDNEY/CHICAGO, Nov 7 (Reuters) – Airlines around the world are tearing up schedules and bringing in new flights to deal with a COVID-triggered trend in corporate travel for executives like Jerome Harris – ditching business trips in favor of day trips. of longer stays.

For Sydney-based Harris, grueling one-day trips to Melbourne or Brisbane — meaning four taxi rides, two flights, extended waits and the risk of delays — are no more after a pandemic-driven reassessment of his travel habits.

Industry data shows business travelers are taking longer trips than before COVID-19, leaving airlines to adjust flight plans. Environmental concerns, rising ticket prices, increased flight cancellations amid staff shortages and a boom in online videoconferencing all undermine the one-day travel option as an industry standard.

Harris, who works for an infrastructure company, said: “I’m more than happy to save the effort and carbon and spend a few days in one place and have time to meet different people and visit different projects.

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Corporate travel agency CWT said in global terms, the proportion of domestic one-day trips fell by more than 25% compared to 2019 levels as online meetings grow in popularity.

In markets from Australia to the United States, airlines have to adapt to maximize revenue. US carriers, for example, are adding more midweek flights as travelers take more business and leisure trips, capitalizing on the greater flexibility of working remotely.

“Tuesdays and Wednesdays are not what they used to be in a traditional week,” according to United Airlines ( UAL.O ) Chief Commercial Officer Andrew Nocella, speaking on an earnings call last month.

For corporate travel agency CWT’s Asia Pacific head of sales, Akshay Kapoor, the change is long-term for both airlines and hotels.

“I think the trend away from day trips in favor of longer stays is here to stay as travelers become more environmentally and fiscally conscious,” Kapoor said. “This could translate into a higher revenue per available room for hotels in the long term.”

PAY MORE, STAY LONGER

At a time when airfares have risen, the average length of a domestic business trip to Australia increased to almost four days in the third quarter of this year, from three in 2019, according to Flight Center Travel Group Ltd (FLT.AX).

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“I think probably because people are paying more they’re staying longer,” Head of Corporate Center at Flight Australia and New Zealand Melissa Elf said.

Qantas Airways Ltd ( QAN.AX ) and Virgin Australia say higher airfares have so far offset any impact on revenue from fewer business trips. But travel patterns are becoming apparent in airline schedules, where flights on popular business routes have fallen, reflecting declining same-day demand, out of proportion to that preferred by leisure travelers.

Sydney-Melbourne is now the fifth busiest domestic route in the world, according to travel data firm OAG, up from second in 2019.

In North America, business-heavy Los Angeles-San Francisco, the busiest domestic route in 2019 according to OAG, dropped to eighth. It was replaced at the top by leisure-dominated Las Vegas-Los Angeles and Honolulu-Maui.

Ajit Chouhan, a human resources executive based in Texas, used to go on business day trips to San Francisco at least once a month before the pandemic. But now he uses Zoom or Microsoft Teams for shorter meetings, describing the online options as “practical and more productive”.

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To be sure, the one-day trip is not dead, especially when companies want to sign up new customers face-to-face, said American Express Global Business Travel Travel Chief Operating Officer Drew Crawley.

“If I’m on a business trip, do I want to stay an extra day if my partner is at home?” he said.

But the proportion varies by industry and is declining. One-day trips accounted for about 4% of domestic business travel globally in 2019, according to CWT data, versus 3% now.

For Sydney-based Harris, avoiding same-day travel has also helped him avoid some of the frustration of travel disruptions as airlines increase capacity while understaffing.

“Losing a few hours on a three-day trip is not the end of the world, but messing up on a one-day (trip) is very stressful,” he said.

Reporting by Jamie Freed and Rajesh Kumar Singh; Edited by Kenneth Maxwell

Our Standards: The Thomson Reuters Trust Principles.

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