Analysis: Airlines restart as COVID sparks revolution in one-day business trips

  • The most popular flight routes have changed since 2019 – OAG
  • Higher airline ticket prices compensate for the decline in travel
  • Environmental concerns are a factor for some companies

SYDNEY/CHICAGO, Nov 7 (Reuters) – Airlines around the world are tearing up schedules and introducing new flights to cope with a COVID-triggered business travel trend for executives like Jerome Harris – the phasing out of one-day business trips in favor of longer ones stays

For Sydney-based Harris, grueling one-day treks to Melbourne or Brisbane — which means four cab rides, two flights, longer waits and the risk of delays — are over after a pandemic-related reassessment of his travel habits.

Industry data shows business travelers are taking longer trips than pre-COVID-19, prompting airlines to adjust flight schedules. Environmental concerns, rising ticket prices, increased flight cancellations due to staff shortages, and a boom in online video conferencing are eroding the one-day travel option as the industry standard.

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

Corporate travel agency CWT said the proportion of one-day domestic trips worldwide fell more than 25% compared to 2019 as online meetings become more popular.

In markets from Australia to the United States, airlines must adapt to maximize revenue. US airlines, for example, are adding more weekday flights as travelers embark on more trips that combine business with leisure, with many benefiting from greater flexibility to work remotely.

“Tuesdays and Wednesdays aren’t as strong as they used to be in a traditional week,” United Airlines (UAL.O) chief commercial officer Andrew Nocella said on a earnings call last month.

For Akshay Kapoor, Head of Asia Pacific Sales at corporate travel agency CWT, the transition is long-term for both airlines and hotels.

“I think the trend away from day trips to longer stays will continue as travelers become more environmentally and tax conscious,” Kapoor said. “This could lead to higher revenue per available room for hotels in the long term.”

PAY MORE, STAY LONGER

The average length of a domestic business trip in Australia rose to almost four days in the third quarter of this year, up from three in 2019, at a time when airfares have been skyrocketing, according to Flight Center Travel Group Ltd (FLT.AX).

“I think because people are likely to stay longer because they’re paying more, they take advantage of staying longer,” said Melissa Elf, head of Flight Center Corporate for Australia and New Zealand.

According to Qantas Airways Ltd (QAN.AX) and Virgin Australia, higher fares have so far offset any revenue impact from reduced business travel. But changing travel patterns are evident in airline schedules, where flights on popular business routes have declined, reflecting declining same-day demand relative to flights favored by leisure travelers.

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

In North America, the busy Los Angeles-San Francisco route, the busiest domestic route in 2019 according to OAG, ranks eighth. It has been replaced at the top by the leisure-dominated cities of Las Vegas-Los Angeles and Honolulu-Maui.

Ajit Chouhan, a Texas-based HR executive, used to make a one-day business trip to San Francisco at least once a month before the pandemic. But now he uses Zoom or Microsoft Teams for shorter meetings and describes the online options as “more convenient and productive”.

Of course, the one-day trip is far from dead, especially when businesses are looking to engage new customers in person, said Drew Crawley, chief operating officer of American Express global business travel.

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

However, the proportion varies depending on the industry and is declining. One-day trips accounted for around 4% of domestic business trips worldwide in 2019, according to CWT data, up from 3% today.

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

“Losing a few hours on a three-day trip isn’t the end of the world, but being interrupted on a one-day (trip) is very stressful,” he said.

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

Our standards: The Thomson Reuters Trust Principles.

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