U.S. business travel surge as corporate travel declines

593
3

Aug 4 - Commercial airlines are making a beeline for executives wary of flying direct to business meetings due to a limited offering of private flights, as corporate travel eases back this fall after a pandemic-induced slump. Before the pandemic privat air traffic reached 2019 levels, helped by wealthy leisure travelers who feared private flight to avoid contracting virus or due to fewer direct flights earlier in the week to avoid pollution conditions.

Now some charter businesses are trying to extend that advantage with booked flights to some business hubs still below 2019 levels despite a broader leisure-driven rebound in commercial traffic.

Corporate planemakers such as General Dynamics Corp's Gulfstream Aerospace and Textron Inc are boosting production as demand increases. The Rival Bombardier reported earnings on Thursday.

Corporate travel, expected to revive this fall, is crucial for aviation because of demand from frequent flyers and airlines' appetite for higher-margin premium fares.

But a full recovery could take years due to rising U.S. COVID values and more aggressive Delta variants in remote work zones.

Major U.S. carriers are restoring routes as restrictions eases. Delta Air Lines will more than double the number of daily flights between the United States and Canada starting in September, once fully-vaccinated Americans can go to the country.

But major carriers' domestic flights dipped 15.3% in July 2021 compared with 2019, with flight to and from certain hubs down by half, according to Avia data company Cirium.

That creates an opening for companies like Airshare, with three new Bombardier Challenger Jets this year to expand. Its business traffic has returned to 2009 levels of 90% of 2018 revenues.

For you to be able to get in and out of a destination for a meeting on the same day is very difficult, said Andy Tretiak, chief marketing officer of Airshare, which offers charter flights among other services.

They have to cater their schedule around airline, Tretiak said in July about his customers who also fly commercial.

They would just do the opposite.

For the weekly average from FlightAware, U.S commercial flights were above 2020 levels but still jumped 19% compared with 2019, according to the overall average from July 21-28. By contrast, business aviation flights were up 223% the week compared with 2019.

David McCown, president of the Americas for Air Partner PLC which provides aircraft charters among other services, expects to get some new corporate shuttle contracts by Q3, likely by Q 4.

He said UK-based Air Partner brokered a new shuttle contract in 2020 from an energy company that couldn't find a direct airline flight to Latin America due to cuts.

Still, private aviation remains extremely expensive and relatively niche. Business aircraft flights account for just 4 percent of the total passenger traffic at commercial airports used by commercial airlines, according to the National Business Aviation Association.

Air Partner's advertised U.S. hourly rate for a midsized cabin is $7,300.

Tretiak acknowledged private aviation can't beat airlines on price, but can attract travelers through quick service at smaller airports.

In June FlightAware said that 9,399 flights were demolished in the United States due to labor shortages, among other reasons.

What we're competing with is the value of our time, tretiak said.