Business travel has all but evaporated, leaving many airlines scrambling to get as many leisure travelers as they can. However, United Airlines, which has historically done well with scoring business customers, is now partnering with Peerspace to get more business travelers onboard.
A new collaboration
United announced a new collaboration with Peerspace, a marketplace where companies can book meeting, production, and event spaces. Now, with this new partnership, companies can also bundle flights with their meeting space rentals. The partnership is geared to target customers that are adopting flexible, remote work policies.
The collaboration comes at a cost. The initial entry package is $1,500 a month, but that includes no flights. Below are the various packages, cost, and United benefits:
- Burst ($5,000/month): 60 United flights, 24 Economy Plus upgrades, 24 United Club passes, and four United Club memberships
- Distributed ($8,000/month): 120 United flights, 36 Economy Plus upgrades, 24 United Club Passes, six United Club Memberships, and two Premier Silver status holders
- Anywhere ($12,000/month): 180 United flights, 48 Economy Plus upgrades, 24 United Club passes, eight United Club memberships, and four Premier Silver status holders
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Flights are booked in economy, and, depending on the package, businesses receive a certain number of upgrades to extra-legroom economy. It does not look like United is selling premium cabin tickets as part of this partnership.
Will people want to travel and work remotely?
Peerpsace conducted a study that found that 80% of respondents working at companies with over 100 people found that the current health crisis has positively changed their perception of remote work. More than 60% of employees indicated their current work policy provided the option to work remotely indefinitely– which is not surprising given the health crisis has shown few signs of abating.
In addition, 70% of respondents working at companies with more than 100 employees stated that COVID-19 has caused them to strongly re-evaluate if they need to live in the same city as their headquarters.
Most people right now are not traveling for pleasure, but rather for leisure. United recognizes this and is still planning on building up its leisure strategy in the short-term.
Janet Lamkin, Senior Vice President at United Airlines, commented in a statement,
“As good as technology has been at allowing us to connect virtually over the past few months, it’s no substitute for in-person, human interactions. Demand for business travel is returning in new ways and our relationship with Peerspace provides some employers with even more flexibility as they move towards getting their employees back together in a safe and cost-effective way.”
What travelers is United targeting?
These are not big corporate contract travelers. They are also not mom and pop style operations. Rather, United Airlines is looking at targeting small- and medium-sized businesses. It is also targeting companies who would likely not book their travelers into a premium cabin anyways.
By going after these travelers now, United can get some much-needed revenue and also get some travelers it can retain for a while. Travelers will still individually earn miles and status on United, which in turn should drive loyalty not just within the business realm, but even outside of it. Airline loyalty programs have served well to get customers to stick with an airline and United is hopeful that travelers will then choose them in the future as well.
The one catch here is that many companies are also looking at business travel as an unnecessary expense– especially in the current environment. However, some employees at these companies in big cities like New York, San Francisco, Chicago, etc., may find that their employees may not need to live where the company is headquartered and let them fly in for meetings or events as necessary. It also could allow them to shut down some of its office spaces and move to rent spaces as required, which might be cheaper.
Ultimately, this is all a big game that airlines are playing with travelers to try and get them onboard aircraft. United is hoping that these small- and medium-sized businesses can unlock some revenue and bring some travelers to United who might earn status and stick with the airline for longer.
Do you think United is taking the right step with this new partnership? Would you want your company to take advantage of such packages? Let us know in the comments!