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 are offsetting the drop in travel
  • For some companies, environmental concerns are a factor

SYDNEY/CHICAGO, Nov 7 (Reuters) – Airlines around the world are scrapping schedules and bringing in new flights to tackle a trend in corporate travel caused by the COVID-19 pandemic for executives like Jerome Harris. canceling day trips in favor of longer stays.

For Sydney-based Harris, grueling day trips to Melbourne or Brisbane, which mean four taxi rides, two flights, long waits and the risk of delays, no longer do after the pandemic reassessed his travel habits.

Industry data shows that business travelers are taking longer trips than before COVID-19, leaving airlines to adjust flight plans. Environmental concerns, rising ticket prices, increased flight cancellations due to crew shortages and the boom in online video conferencing are all undermining the day trip option as an industry standard.

“I’m happier to save effort and carbon and do a few days in one place and have time to meet a lot of people and visit a lot of projects,” said Harris, who works for an infrastructure company.

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Globally, the share of domestic day trips has fallen by more than 25% compared to 2019 levels as online meetings grow in popularity, corporate travel agency CWT said.

In markets from Australia to the United States, airlines are forced to adapt to maximize revenue. US carriers, for example, are adding more midweek flights as travelers take more trips that combine business with leisure, many of whom take advantage of the greater flexibility of telecommuting.

“Tuesdays and Wednesdays are not as uneventful as during the traditional week,” said United Airlines ( UAL.O ) Chief Commercial Officer Andrew Nocella in an earnings call last month.

For Akshay Kapoor, head of sales for Asia Pacific at corporate travel agency CWT, that shift is long-term for both airlines and hotels.

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

PAY MORE, STAY LONGER!

The average duration of a domestic business trip to Australia rose to almost four days in the third quarter of this year, compared with three days in 2019, as airfares rose, according to data from Flight Center Travel Group Ltd ( FLT.AX ).

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“I think probably because people are paying more, they’re taking advantage of longer stays,” said Melissa Elf, head of Flight Center Corporate Australia and New Zealand.

Qantas Airways Ltd ( QAN.AX ) and Virgin Australia said higher airfares had so far offset the impact of fewer business trips. But changing travel patterns are becoming evident in airline schedules, where flights on popular business routes are down, reflecting a drop in same-day demand in proportion to those preferred by leisure travelers.

Sydney-Melbourne is currently the fifth busiest domestic route in the world, according to travel data company OAG, down from second in 2019.

In North America, business-heavy Los Angeles-San Francisco, the busiest domestic route of 2019, fell to eighth place, according to OAG. At the top, it has been replaced by the leisure-dominated cities of Las Vegas-Los Angeles and Honolulu-Maui.

Ajit Chouhan, a Texas-based human resources executive, has been taking day trips to San Francisco at least once a month since the pandemic. But now he uses Zoom or Microsoft Teams for shorter meetings, describing the online options as “convenient and more efficient.”

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Of course, the day trip is far from dead, especially when companies want to sign up new customers face-to-face, said Drew Crowley, chief operating officer of American Express Global Business Travel.

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

But the proportion varies by industry and is declining. According to CWT, day trips made up about 4% of domestic business trips worldwide in 2019, up from 3% now.

For Sydney-based Harris, avoiding same-day trips has also helped him avoid some of the frustrations of travel chaos as airlines have increased capacity while understaffing.

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

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

Our standards. Thomson Reuters Trust Principles.

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