Even if Covid-19 vaccines are widespread, business travel is likely to be changed by the pandemic. The travel budget has been cut and some meetings remain virtual. Conferences and meetings can be crimped.

But how much? This is important not only for airlines and their employees, but also for their customers – travelers. That’s because higher tariffs paid by corporate customers are actually subsidizing cheap tariffs for vacationers. In addition, less business travel means airlines are planning fewer flights on business routes such as New York, Chicago, London and Tokyo. That means fewer seats for vacationers.

American, United, and Delta CEOs estimate that the aviation industry will be changing forever. All say that with observers like this, business travel will fully return if it can take a few years Bill Gates, who recently proposed Half of all business trips will never return.

Baggage claim like this lonely one at Chicago’s O’Hare International Airport will be busier after the pandemic, but it will be years before airlines get back to business levels in 2019. Some business travel is likely to be replaced by technology and technology will never return.


Photo:

Scott Olson / Getty Images

Estimates aside, one look at the data suggests that between 19% and 36% of all air travel is likely to be lost, based on a business travel analysis I worked on with three aviation industry veterans.

“Brick and mortar retail was destroyed by e-commerce, and I think this is a parallel story,” said Jay Sorensen, president of IdeaWorks, an aviation consultancy and a member of our group. The others are Ben Baldanza, former CEO of Spirit Airlines and current board member of

JetBlue,

and consumer advocate Charlie Leocha, president of Travelers United, a passenger advocacy organization.

We started meeting online weekly when the pandemic started. We compared notes on our own trips and complained about the sudden depression in the travel industry. And we were frustrated with the lack of good data on how the Covid-19 pandemic would affect airlines and travel.

We have compiled data on business travel from various sources and broken down the market by travel purpose such as sales, technical support or conventions and trade shows. This is not usually how the market is measured. Most business travel data relates to how much automakers, universities, or other industries spend on travel. Then we estimated the minimum and maximum percentage of trips that could be lost to technology in each category. Some purposes are easier to replace with technology than others. Sales pitches are more likely to revert to face-to-face meetings because of the competitive nature of successful business. In-house training, however, can be more virtual than personal. Multiplying the lost trip estimates by the proportion of business trips in each of our seven categories gave an overall lost trip estimate: 19% to 36%.

Business travel has a disproportionately high impact on airlines: The top 10% to 15% of customers with global airlines usually account for around 40% of sales. A total of,

Bank of America

It is estimated that business travel contributed $ 334 billion to total travel industry revenue of $ 1.1 trillion last year.

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If you’ve been a frequent business traveler, how has your experience changed since the pandemic – and what changes do you think are likely to continue? Join the following conversation.

As a rule, business trips imagine business people who meet existing customers on the go and pursue new customers or take part in conventions and trade fairs. But that is far from the overall picture. According to our studies, around 25% can be classified as sales and security customers, and another 20% as congresses and trade fairs. To support existing customers, add a category we’ve named “Professional Services,” which includes legal, advisory, and research and you get roughly two-thirds of the business travel cake.

After looking through data from various sources and surveys from around the world, we realized that some assumptions about business travel need refining. For example, around 20% of this is in-house meetings and training – a category that could be replaced by online meetings. In the past, commuting to work made up around 5% of all business trips. Post pandemic that could be reduced by working remotely. In both categories, we’ve estimated that at least 40% of these trips will be replaced by technology and could go up to 60%.

At the other end of our scale, we estimated that the loss from sales travel would be anywhere from zero to only 20%. Congresses and trade shows are likely to bounce back as they are seen as efficient ways to meet customers, recruit business, and keep an eye on the competition. There will be major losses in categories like tech support, where travel can be replaced with virtual visits.

We reviewed our findings with industry representatives such as airline executives, U.S. and international trade associations, and corporate travel agents. Your feedback led to some refinement of the categories and supported our findings.

The worst scenario – losing more than a third of all business trips – would change air travel dramatically. “That’s a huge number,” says Mr. Baldanza. “If 36% really happens, that’s a big problem for the US aviation industry, and yet that’s a believable number for me.”

Airlines like American, Delta and United in the US and overseas airlines like this

Lufthansa,

British Airways

and Singapore are built around business travelers. It affects where they fly, how they draw up flight schedules, how they configure planes, and everything from luxury airport lounges to major investments in fancy new terminals. Their frequent flyer programs are designed to reward expensive customers.

In some places, travel bubbles are in development to revive air traffic that declined during the pandemic. WSJ explains how reopening heaven with no quarantine requirements at either end of a trip can help restart the global economy. Illustration: Crystal Tai

Some airline executives find that technology has always stimulated more business travel, not less. The easier it is to make connections in the business world, the more reasons there are to meet people. Others say it’s different this time. Video technology lives on on all of our laptops and phones, and we are now well educated and efficient. Why not speak to a client online instead of taking a two-day trip for an hour-long meeting?

A global survey by consulting firm Oliver Wyman in early October found that 43% of business travelers said that their business trips after Covid-19 would be less than planned. That was more than the 27% who said in May that they thought their business travel would be reduced after the pandemic.

Some large company CEOs have already announced that some of the efficiency benefits developed during the pandemic will continue, such as lower travel expenses.

With the loss of business travel, major airlines will no doubt seek to increase leisure passenger ticket prices to offset the decline in sales. But that can be difficult. Low cost airlines make up about 20% of the capacity of US airlines and can force airlines to get low prices. Many vacation trips are freely selectable and if they get too expensive, not so many people will go.

According to Baldanza, this means that major airlines need to cut costs in order to remain profitable. “If you’ve built your entire airline to get that level of traffic and it’s gone, you still have all the costs in your airline,” he says.

He hopes we’re wrong: “I hope vaccines are great and in 12 months the world will be living a somewhat normal life and anyone who thought they weren’t going to travel is like, ‘Yeah, I will travel. ‘”

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Write to Scott McCartney at middleseat@wsj.com

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