Travel: Combining business and leisure travel has changed the way we fly

During the height of the pandemic, airline executives knew travel would recover eventually when vaccines were widely available. They also had a vague notion that flying patterns would change. They were right on both counts.

Demand is closing in on 2019 levels, and executives are getting a clearer picture of how the pandemic modified passenger behaviour. Those changes and pent-up appetite for travel will continue to benefit airlines despite continued Covid-19 risks and capacity constraints that will keep airfares elevated for some time.  

One of the biggest drivers of the new flying patterns is the ability to work either remotely or from the office. Business and leisure travel are being combined in a new trend that airlines call hybrid work. Customers are extending their business trips to add on a few days of sightseeing. They also have the flexibility to travel more often and to vary their schedules; they can fly during the week and work a couple of days from an Airbnb while the family hits the beach or the slopes.

As a result, United Airlines Holding, which reported third-quarter results last week, had the third-highest revenue per available seat mile in its history in September, which is normally an off-peak month. Delta Air Lines is experiencing more demand during the week and seeing less of the typical spikes of departures on Sunday and Monday and return trips on Friday.  

“What we’ve seen is demand has come back very different in 2022 than it left in 2019,” Delta president Glen Hauenstein said during a conference call with analysts last week.

Domestic flying was the first segment to rebound, and that continues to be strong. Travel to Europe is now leading the recovery of international travel, and Asia is picking up as countries such as Japan begin to reopen.

United has restarted flights from the US to Tokyo and to Edinburgh, Scotland, for example, and added a new one to Cape Town. China is still a big holdout with its zero-Covid policy, and it’s impossible to forecast when that will change.

The trend line is clear: people are returning to the skies. During the height of the pandemic, when airports were ghost towns, some were predicting that travel would never return to normal and workers would just settle for Zoom meetings. It was hard to conceive in 2020 that people would crowd together again to travel by air.

Airlines expect to be fully recovered next year as corporate travel, the last holdout, returns to normal. Covid-19 cases and even deaths are not likely to go to zero, but the risk is on the decline and people are learning to live with it. Packed aircraft, restaurants, concerts and sports stadiums point to people resuming their lives.

The big question is whether the combination of business and leisure trips is a long-term trend and whether remote work will last, providing people with those flexible travel schedules that airlines are loving. For now, airlines are betting this new work-life balance is here to stay.

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