Airlines suffering from business class blues
NEW YORK: The COVID-19 pandemic has ushered in the era of video meetings. But can Zoom really replace in-person meetings that require business executives to travel? US airlines have suffered a steep decline in this lucrative category of travel. They do expect a rebound-just not right away.
CHICAGO: In this file photo taken on October 05, 2020 people travelling wear facemasks as they walk through Chicago O’Hare International airport (ORD) in Chicago, Illinois. The COVID-19 pandemic has ushered in the era of video meetings. But can Zoom really replace in-person meetings that require business executives to travel? – AFP
“I suddenly stopped travelling in March because of the concerns around Covid,” JJ Kinahan, market strategist at TD AmeriTrade, said.
The halt was a bit of a shock for someone who typically spent about 75 nights a year away from home for work. Now his company only authorizes travel on a case-by-case basis. While Kinahan says he does not miss the flights, he does miss the personal connection with hotel doormen and receptionists he would encounter regularly in his travels.
Risk of lawsuits
Companies have to consider the legal ramifications of asking employees to get on a plane. Alexandra Cunningham of the law firm Hunton Andrews Kurth notes that travel is unavoidable in some cases, such as repairs that require a specialized technician. While some workers in enclosed places, like slaughterhouses and cruise ships, have been able to claim compensation after falling ill, it is not clear if an employee would be able to successfully prove they contracted Covid-19 while on a business trip, she said.
‘Bread and butter’
“Business travel is incredibly important to United,” the airline’s chief Scott Kirby said on a recent conference call. “It was our bread and butter,” he said of the segment that has collapsed by 85-90 percent. Kirby tried to remain upbeat though he said he does not see a rebound until late next year, while volume will not return to normal until 2024. Southwest CEO Gary Kelly said the recovery could take much longer. “Just like 9/11, everybody said the world is going to change, people aren’t going to fly. They were wrong,” he said this week on CNBC.
But he added, “I’ll bet you it’s a long time from now-it may be 10 years before business travel recovers.” Delta chief Ed Bastian said the new normal might mean business travel is 10-20 percent lower than the pre-pandemic level as video meetings replace some trips. But “it’s not going to be a substitute,” he said. Meanwhile, the rise in teleworking could even help air travel, as remote workers have to make the trek back to their offices a few days a month, United executive vice president Andrew Nocella said on a conference call. “Business traffic may be different, but we think it will return,” he said. – AFP
