The global decline in air travel will be worse than previously forecast and a new report on corporations’ plans for travel through 2021 shows that the recovery of business travel demand will continue to be sluggish even after one or more Covid-19 vaccines become available, hopefully, in the first half of 2021.

The International Air Transport Association, the airline industry’s global trade group, said Tuesday that global passenger traffic this year will be down a whopping 66% from 2019. Previously IATA had forecast a decline of 63%.

While the revised view is only 3 percentage points worse than IATA’s previous forecast, the enormous numbers of passenger miles flown globally in a year means that measly 3-point difference amounts to a staggering 220.5 million fewer passenger miles being flown this year than previously expected by IATA. Globally in 2019 the world’s airlines flew about 5.2 trillion passenger miles. One passenger flying one mile equals a passenger mile flown. IATA now expects the world’s airlines to fly only about 1.65 trillion passenger miles, total, in 2020.

“The improvement that we saw in the summer months has more or less stopped,” said IATA Chief Economist Brian Pearce.

Globally, airline traffic in August – typically the peak month for air travel – was down 75.3% from the same month in 2019, when adjusted for both the number of passengers flown and the distances they flew. In July, he said the year-over-year drop was even worse: down 79.5%. He did not provide traffic decline figures for September, but his comments implied a much worse picture of demand this month and, likely for the rest of this year.

On top of that, business travel – for which fares are significantly higher – is down more than leisure travel. Furthermore, because international travel – which, again, is more expensive than domestic travel on a per-mile flown basis –  is down much, much more than leisure travel– that means global airline revenues this year will be down by well over two-thirds. Some industry watchers suggest revenue industrywide will be off by as much as 80% or more from 2019.

“The industry is restarting but it looks as though it’s still burning through cash,” Pearce said. “Losses will continue to mount throughout 2020, with bookings data pointing to a weak fourth quarter.”

Those comments and IATA’s even worse revised traffic forecast for the remainder of this year also support the conclusions drawn from a multinational “State of the Market” survey by FCM Travel Solutions and Corporate Traveler, corporate travel units of Australia-based Flight Centre, one of the world’s largest travel agency groups.

That study, which was a follow-up to two similar surveys done in May and June, showed that 90% of businesses are planning to put some of their employees back on the road within three months of governments opening their borders and lifting huge impediments to foreign travel like mandatory quarantines for arriving foreigners. But while there currently is much discussion among travel industry leaders about the need for nations to lift such crippling travel restrictions and to reach broad agreement on health requirements and protocols for international travel, as yet there has been little indication that governments around the world are willing to do any of those things. Thus, predicting when businesses will begin putting their people back on the road in large numbers remains a guessing game.

Beyond that, while businesses are eager to get their sales and client-facing service and support workers back out on the road where they can make sales and bill clients for their time, companies are far, far less eager for the administrative and internal support workers to begin traveling. That means the lucrative conferences, expositions and meeting sub-category within the business travel realm will be much, much slower to recover.

Not only are companies reluctant to put such workers at risk by having them travel for non-essential reasons during the era of Covid-19, many companies have seen huge reductions in revenue this year because of the global epidemic. Thus, they plan to be much more careful about how they spend money over the next year or longer as they rebuild their revenue streams.

In fact, the FCM Travel Solutions survey showed that most of the companies whose travel it manages have put their long-haul international travel plans on hold indefinitely. They, instead, expect to continue weighing the company’s need and customers’ demands vs. the safety of their workers who would be making such trips and the costs of those trips, before dispatching such workers on travel assignments.

And even those companies eager to get their people back on the road again once international borders re-open and the most onerous other barriers, such as quarantines are reduced or dropped say they expect their travel volume going forward to be only half what it was before the pandemic began. The FCM Travel Solutions survey found that before Covid-19 the average individual traveler at the companies it supports took six to eight trips a year. But, those companies now expect their employees who do travel to take only three to four trips a year

The survey also showed that future corporate travel buying behavior will be different and influenced more by more heavily influenced by factors such as the Covid-19 safety protocols employed by airlines, hotels, rental car companies and other travel service providers. In fact, 37% of the companies FCM Solutions supports currently already are reviewing the hotel companies with which they currently have contracts to re-confirm their cleanliness and that their health-and-safety protocols.

FCM Travel Solution’s survey also shows that companies will now expect to be able to book trips at attractive fares and rates just three to four days before departure vs. a standard advance booking window of seven to 10 days previously. Furthermore, companies now will be expecting much greater flexibility when purchasing air fares or other services, a change many U.S. carriers already have addressed by dropping ticketing change fees and certain other types of fees, at least on the type of fares typically bought by business travelers.

FCM’s researchers also noted a significantly greater preference among its corporate clients for flight schedules that would help their workers avoid having to spend a night in a hotel.

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