AIRLINES DOWN ON TRAVEL’S RETURN

Airlines have predicted that business travel will return this fall, but now the companies may be wondering if their optimism is premature. 
Business travelers slowly have been returning to the road, with business bookings reaching 40 percent of pre-crisis levels, the Wall Street Journal reported. (See “Business Travel Rebound?,” Trends Journal, 8 June, 2021.)
American Airlines is adding flights connecting business destinations, such as from New York’s LaGuardia airport to O’Hare in Chicago, the company has said.
Delta Airlines is adding flights to the traditional business hubs of New York and Boston and cutting back on leisure flights that have been popular this summer.
“We’re pivoting our capacity to now supplying more business seats,” Joe Esposito, Delta’s vice-president of planning, told the WSJ.
The company has been polling business customers about their travel plans.
“We don’t want to put the seats in before they fly,” Esposito said.
Delta might need to wait a little longer.
On 4 August, Frontier Airlines reported that its bookings were slowing more than is usual at this time of year, a glitch “directly related to the increased COVID-19 case numbers,” the company said in a statement quoted by the WSJ.
Before 2020, business travelers took up about 10 percent of airline seats but made up as much as 70 percent of some airlines’ profits, industry figures show. Road warriors contributed a similar profit percentage to many hotels, particularly in city-center business hubs such as Houston, New York, and San Francisco.
TREND FORECAST: As we have been reporting, scores of major corporations have announced that they are permanently scaling back their travel budgets, having discovered that an hour-long Zoom call can be just as effective as three days on the road… and cost nothing. Thus, they will be saving big by traveling less. 
Business travel will return to a degree, but as a last choice, not a first choice, for many companies.
That shift will echo through the travel economy, leading not only to scaled-back airline schedules but also to urban hotel closures and downward pressure on the convention center, restaurants and other businesses in the service and supply chain that service these sectors. 
Also, the less business travel, tourism, trade shows and conventions, the less tax revenue for cities that depend on them. Thus, there will be pressure to raise taxes to make up for lost revenue which will in turn escalate new anti-tax, anti-establishment political movements.