Business travel volumes remain significantly below 2019 levels more than 16 months after the end of pandemic restrictions in Europe, despite the Global Business Travel Association (GBTA) forecasting an “accelerated rebound” in corporate travel this week.
Major airline groups British Airways and Iberia parent International Airlines Group (IAG) and the Lufthansa Group reported slower-than-expected rates of recovery in corporate travel in the three months to June.
Both confirmed corporate bookings remain 30%-40% below 2019 levels, while major US carriers have reported the recovery in business travel bookings levelling off since last year.
Yet GBTA hailed the sector’s recovery at its Convention in Dallas this week with the latest Business Travel Index (BTI) Outlook report it produces annually with Visa forecasting global business travel spending will surpass the pre-pandemic level of $1.4 trillion in 2024 and hit $1.8 trillion by 2027.
More: New Cathay Pacific business class disclosed as demand revives
GBTA hails ‘accelerated rebound’ in business travel
It suggested: “The business travel industry has rebounded at a more accelerated rate than expected a year ago . . . fuelled by pent-up demand, more favourable global economic conditions and recession risks that have yet to happen.”
However, IAG chief executive Luis Gallego said corporate bookings had “plateaued” since March despite IAG recording a €1 billion profit for the April-to-June quarter amid “very strong leisure demand”, noting: “Corporate traffic is recovering more slowly than we thought.”
Gallego said: “We see a correlation between business travel and people returning to the office. Our Spanish airlines [Iberia and Vueling] see a stronger recovery [than] BA or Aer Lingus.”
BA’s corporate travel revenue remains “around 69% [but] volumes 60%-61% of 2019 levels”, he said, while revenues at Iberia are “closer to 95% and volumes 82%”.
“Specifically at BA, we didn’t see any recovery from the second quarter of 2023. Volumes are plateaued.”
Lufthansa Group chief executive Carsten Spohr noted a similar trend earlier this month despite hailing “the financially best second quarter” in Lufthansa’s history.
Spohr reported: “Business travel recovered to about 60% of pre-crisis passenger numbers.”
He forecast an increase in the remainder of the year “driven by the largescale reopening of China and Japan” and noted: “Business travel has recovered to more than 70% on transatlantic [routes], outpacing short haul and domestic German corporate travel which in our view will remain structurally smaller.”
Lufthansa expects corporate demand to recover only to 70% of the 2019 level by the end of this year. BA is targeting 68%.
US carriers have reported corporate bookings plateauing at about 75% of 2019 levels since last year.
Delta Air Lines senior vice-president for Europe, the Middle East, Africa and India Matteo Curcio told Travel Weekly in July: “The corporate market is still lagging at 70%-75% of 2019’s traffic.”
JetBlue chief executive Robin Hayes admitted this month that “business travel may not be coming back”.
More: New Cathay Pacific business class disclosed as demand revives