Business class travel helps post-pandemic airline sales take off | Airline industry

Business class travel helps post-pandemic airline sales take off | Airline industry

It was proclaimed moribund, if not doomed, just a year ago. But now, is business class air travel taking off again? British Airways’ owner IAG, forecasting a return to profit this year, said that a strong recovery in business bookings was driving the recovery.

In a world where half the City can no longer be bothered to get on the Northern line to return to the office, and bankers begrudge the cost of a train from Surrey, how can airlines claim to be pulling this off?

There are a couple of things to note. Firstly, not all the premium seats are necessarily occupied by passengers travelling solely for work. Plenty of holiday companies, from the travel giant TUI to BA itself, have reported that more affluent customers, who kept earning and in some cases amassed hefty savings while forced to stay at home during the pandemic, are now blowing a lot more on a holiday – even as the cost of living crisis hits many.

But work trips are also returning. The bigger, multinational firms may have adopted Zoom for many internal meetings, with long-term effects for airlines. Most assume there will be far fewer of the kind of flights simply for, say, a European managing director to touch base with a boss in a US global headquarters.

However, many small and medium firms say they cannot do business that way, particularly in terms of winning new clients or sealing contracts. That isn’t necessarily just to the benefit of the likes of IAG, with wide-body planes and business class cabins: in short-haul, easyJet has claimed to steal a march among small and medium-sized enterprises (SMEs) whose budgets may be ever tighter.

BA’s boss, Sean Doyle, confirms that the SMEs were the first to return, but the bigger corporations are now booking, with banking and finance leading the charge to the skies. Accountancy and consultancy are close behind, and sectors such as IT and pharmaceuticals are now coming back.

Speaking as owner IAG announced quarterly results, Doyle said business traffic was 2.5 times higher in March than it was in January, and was now back to 65%-70% of 2019 levels. The lucrative transatlantic routes remain the focus, with bookings coming in from both ends – still led by leisure, but for business, “momentum is building”.

There are clear barriers still to a full recovery: strict Covid entry policies deter or prohibit flights to some key Asian business destinations, especially China, Hong Kong and Japan. The climate crisis is pushing companies to burnish their environmental credentials, and curbing their own air travel is an obvious way to reduce their carbon footprint.

But conferences are going back “real world” rather than online, and many employees will be desperate to see the world after being cooped up for two years. Arguably the pandemic has made business travel more feasible: working remotely has proved that staff do not need to be in the office to be productive. Rather than just whizzing home after a packed schedule, staff can conduct more of their normal duties while staying abroad longer – potentially more palatable to both the firm and the business traveller.

Good news for BA, if bad news for the passengers upgrading their holiday – the front of the cabin, says Doyle, is looking ever more like 2019 all over again.