Airlines count on business travelers to keep recovery going

FILE - People wait in a TSA line at the John F. Kennedy International Airport in New York, Tuesday, June 28, 2022. With summer vacations winding down, airlines are counting on the return of more business travelers to keep their pandemic recovery going into fall 2022. Air travel in the United States, bolstered by huge numbers of tourists, has nearly recovered to pre-pandemic levels.

Business travelers generally pay higher fares, so their absence has an outsized impact on airline revenue and profit. Conventions and other big meetings are another key driver of business travel, and also seem to be coming back, Thackston said.Airline officials say that travel by small-business operators has recovered nearly fully, but that many corporate travelers have not returned to the road or skies. They say that during the pandemic, some companies imposed tougher restrictions for health and budget reasons — even requiring that high-level executives approve all travel.

Southwest officials said Tuesday that the next two weeks will be critical to gauge demand for business travel.The nature of business travel is changing as companies become accustomed to smaller travel budgets. Some trips are being replaced by video calls, perhaps permanently. Speculative sales trips could be especially easy for companies to cut.

Vasu Raja, the chief commercial officer at American Airlines, said demand has dropped for one-day business trips in which someone leaves in the morning and flies home that evening. The cost of travel is expected to keep rising, putting pressure on corporate budgets. A recent report from travel-management company CWT predicted that fares paid by business travelers will rise nearly 50% this year and 8% next year, and hotel rates will rise 19% this year and 8% in 2023.Most U.S. airlines reported profits for the April-through-June second quarter.

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