- Business travel has not yet rebounded to its 2019 peak levels, with many corporations preferring video conferencing and rail travel.
- Global business travel firms warn this could impact corporate relationships, while environmentalists see it as a crucial step to reducing emissions.
- Significant organizations, including tech company SAP, accounting firm PwC and Lloyds Banking Group, have cut their corporate air travel emissions by over 75% since 2019.
- Some companies have seen an increase in air travel related emissions compared to 2019.
- Business travel accounted for almost half of the passenger revenue for U.S airlines before the COVID-19 pandemic.
- There has been a shift in strategies among airlines, with some attempting to counter the drop in business travel by targeting premium leisure travellers.
Evolution of Business Travel
Despite the global recovery, the rate of business travel has not yet bounced back to the heights of 2019, with many firms opting for video meetings or train journeys instead of air travel. This shift could undermine corporate connections, suggest global business travel firms. However, environmental advocates insist that this change is crucial in limiting total emissions.
The environmental action group, Transport and Environment, has advocated for a 50% reduction in business travel from pre-COVID levels within this decade to curb global warming at 1.5 degrees Celsius. Large corporations including SAP, PwC and Lloyds Banking Group have all trimmed their business air travel emissions by above 75% against 2019 levels, as per the Travel Smart Emissions Tracker analysis.
New Means of Communication
“The future entails increased online meetings, more train travel and less plane travel,” stated Denise Auclair, Travel Smart campaign manager. However, the study revealed that 21 companies exceeded their 2019 flight levels, with L3Harris, Boston Scientific and Marriott International ramping up their carbon emissions by more than 69%.
Impact on Aviation Industry
The decline in corporate travel could adversely affect airlines and overall economic growth. However, the robust consumer demand for post-pandemic flight travel is softening these concerns. American Express Global Business Travel and the Harvard Business Review’s joint survey published in September indicated that 84% of enterprises still perceive face-to-face trips as offering “tangible business value”.
In the United States, business trips generated up to half the passenger revenue for airlines prior to the pandemic, enabling high-margin premium seat sales and weekday flight fill-ups. Meanwhile, European airlines such as Air France have introduced new strategies, with others seeking to compensate for the loss in business travel by selling more premium journeys to leisure vacationers.
This shift in corporate air travel trends can influence the trading landscape, particularly impacting travel- and aviation-related shares, and possibly triggering a retrospective examination of environmental, social, governance (ESG) considerations in trading decisions.