The United States is traveling again, with up to nearly two million people flying a day across the country in recent weeks. However, only a small group of these passengers are flying for business. Nonetheless, American Airlines president Robert Isom is not worried about the return of business travel. He has faith in this segment’s recovery process.
Falling behind domestic leisure
Domestic leisure travel is already seeing strong returns, with load factors at approximately 90% heading to the end of last month. Overall, the peaks of the summer are expected to be at 90% compared to 2019.
So, with domestic leisure returning excellently, the next steps would be to get two other segments in the right direction again – long-haul international and domestic. Both of these markets have been shaken up amid restrictions and habit changes. Nonetheless, American Airlines’ leadership is not too concerned about their return.
The demand is there
The carrier shares that even as some markets open up, such as in Europe, there is an immediate response by the public. Therefore, there is evidence of plenty of pent-up demand in this field.
In the business realm, American Airlines shares that there is a slow return. Notably, Isom highlights that 47 of his company’s top 50 corporate accounts are all planning to return to travel by the end of the year.
There are already regions in the United States where many corporate offices are opening up again, and people are traveling for meetings. Isom anticipates that this trend will continue into the second half of this year.
Isom shared the following Bernstein 37th Annual Strategic Decisions Conference yesterday:
“There are a lot of companies that need to go back, whether it’s from a sales perspective, or just checking up on assets. So, when things open up, when offices open up, business, in my view, is returning. So, as we take a look at that in the future, it really is tied to vaccination rates and offices opening. Then, ultimately, businesses can get back to it.”
Airlines are also highlighting how businesses can actually become even more efficient with travel schedules amid the advancement of remote working technology. For instance, in the past, if someone had to travel to another region for a meeting, they may be cut off from the office. However, with the world transitioned to working while away, executives and staff can continue to communicate well via their devices on the same day as a remote meeting.
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Preparing for what’s to come
Before the pandemic, transoceanic routes were among the busiest across the globe. A large portion of the activity on these services was business-related. Thus, the return of business and long-haul travel will go hand in hand.
So, as American steers through recovery, it has been in close communication with its international partners to make the most out of the return. The carrier has been working well with its domestic partners such as JetBlue and Alaska Airlines to keep its passengers connected. It’s also determined to replicate this approach on a global spectrum with the likes of IAG, Qatar Airways, and Japan Airlines.
Isom summarised the next stage with the following, as per the conference:
“We have the fleet, the network, and the relationships to best take advantage of how international demand can return. I do think that the business markets, internationally, are going to lead the way. I am hopeful that we are able to work with the US government, and also in the EU and UK, to open up markets, sooner rather than later.”
Overall, American is confident that it is well-positioned to take advantage of opening markets. Travelers, airlines, and companies are all keen for consistency in the industry amid the ongoing restrictions limiting international business travel. Therefore, there needs to be a robust solution to make way for the return of safe operations across the continents. Hopefully, progress in vaccinations and health passes will catalyze this recovery.
What are your thoughts about American Airlines’ stance on business travel? Do you agree with Robert Isom’s sentiments? Let us know what you think of the prospects in the comment section.