The (flight) path ahead for business travel is uncertain, but some industry insiders are hopeful of rapid recovery post-pandemic. By Jenny Southan.
In just a couple of months, our entire world has been turned upside down. We’ve been grounded, quarantined at home and forced to conduct our work through video calls. The travel industry is in crisis – airline networks are flying skeleton operations, and hotels and airports are empty. As we are all very much aware, the Covid-19 pandemic is causing immense damage to our lives and economies, and it can feel overwhelming.
As companies switch to survival mode, there is, nevertheless, a good dose of optimism, determination and pragmatism out there, which we can learn from. What do the experts think? Kurt Ekert, president and CEO of Carlson Wagonlit Travel, said in a statement: “Business travel is one of the first industries to recover from global interruptions, and we will be there when things improve to support our customers’ needs and as an industry leader.”
ABTA Magazine caught up with industry insiders to ask for their thoughts. Tristan Smith, vice-president of customer success at Egencia, says: “We strongly believe that where there’s life, there’s travel – and that will still ring true after this pandemic. Once travel restrictions ease, we are confident that we can provide all our customers the full support they need to reshape and re-launch their travel programmes using our data, insights and support teams to give customers and travellers the peace of mind they need.”
She adds: “Business travel is a strategic lever for organisations to grow, and we expect businesses post Covid-19 to be focused on getting back on the road as quickly and safely as possible to get their business back to ‘normal’. We know business travel is hugely resilient, as are we. The sector won’t witness a dramatic recovery overnight, and it will take some time to restore, but we will emerge from it better, wiser and stronger.”
Unfortunately, it is a sad fact that in addition to loss of life, there will be commercial casualties too. According to the International Air Transport Association (IATA), the aviation industry could face US$113 billion in revenue losses (this is a fifth of overall revenues in 2019) as global flight capacity is slashed. And this could increase further still, with the expectation that some airlines won’t see the skies again when all of this is over, unless they receive government bailouts or are acquired by competitors.
Concerned about a prolonged ban on travel, British Airways chief executive Alex Cruz released a statement in March entitled, “The Survival of British Airways”. In it, he says: “Airlines with a weak balance sheet or carrying large debts face a dire situation.” Although he reminds people that BA is “more financially resilient than ever before”, it is “under immense pressure” – in part, because of the curtailing of business travel by corporate clients.
Whether or not it would be looking for support from the government (see ABTA’s Save Future Travel campaign, pX), the UK chancellor of the exchequer, Rishi Sunak, says there won’t be an industry-wide bailout to airlines and airports (instead it will provide “bespoke support” on a case-by-case basis). At the beginning of April, Rolls-Royce and Airbus began lobbying the government to provide Virgin Atlantic with £500 million in state aid. By this point, it had reduced its schedules down to just three routes from London Heathrow – to Hong Kong, Los Angeles and New York JFK – and none from Gatwick, Manchester, Glasgow or Belfast.
What’s the prognosis for the airline? Lee Haslett, vice-president of UK and European sales for Virgin Atlantic, tells ABTA Magazine: “The rapid acceleration of Covid-19 has resulted in a temporary but significant downturn in business travel. However, when the world emerges from Covid-19 and normal operations resume, business travel is going to be a vital part of the economic recovery in the months that follow.
“Connectivity [is vital] to help multinational companies seize new opportunities, allow SMEs to reach international markets again, and re-establish the high-value professional ties that only in-person contact can truly foster – as helpful as a Zoom video call might be during these difficult times.”
He adds: “For Virgin Atlantic’s corporate customers, our role now is to provide timely and accurate information, for instance keeping them informed about our rigorous cleaning operation on board or how we’re extending silver and gold loyalty status while they’re unable to fly, so that when governments relax travel restrictions, the public health risk subsides globally and the gradual resurgence in business travel takes place, they have the confidence to travel.
“The health and well-being of our people and customers always comes first, and while many corporate travel policies remain strict, Virgin Atlantic is committed to providing as much flexibility as possible so that business trips can be rebooked at a later date – with the change fee waived – right up until April 30, 2021.”
Adaptability, in short, is vital. Martin Ferguson, vice president of public affairs for American Express Global Business Travel (GBT), tells us: “There are too many unknowns for anyone to predict how long the situation will last. We are continuously monitoring events and data, and seeing very few new bookings, along with many cancelled and postponed meetings and events. We hope to see some recovery later this year, but need to be prepared for significantly reduced volumes through the balance of 2020.
“We have helped hundreds of thousands of travellers with rebooking, cancellations, refunds and repatriation, and this will keep happening as travel starts and stops over the coming months. There will be a ‘new normal’, with an expectation for disruption and uncertainty.
“We expect the business travel experience will look somewhat different during the recovery, particularly in the early days. For example, some of the measures being taken by the Chinese government – such as international flights to Beijing being diverted into 12 secondary cities as first points of entry for screening and quarantine, before being rerouted back to Beijing.
“However, GBT’s message to clients is that while the Covid-19 crisis has had an unprecedented impact on our industry, we can draw confidence from the pattern of history: business travel is a force for good, demand will return and we are confident that we, along with our airline and hotel partners, will be ready when it does.”