8 Special reportThe future of travel The EconomistFebruary 13th 2021
2 otherwise have neither the time nor the excuse to attend, says Car-
oline Bremner of Euromonitor, a data firm. Plenty of low-level in-
ternal meetings will migrate permanently to the online world. One
executive who has not flown in months happily notes that the sort
of trip that required flying halfway around the world for one short
meeting will go for good. Though the number of trips is likely to
fall, their length may increase as executives try to fit in more, per-
haps visiting several outposts in one country in a single trip.
If around a fifth of business travel never returns, that will have
big consequences for airlines. Most accommodate some business
travellers. Legacy airlines, which rely disproportionately on long-
haul business customers, will suffer the most. But even low-cost
carriers, which have targeted business travellers in recent years
with flexible tickets at higher fares, will feel the pinch. Some 17m of
easyJet’s 96m passengers in 2019 were flying on business, almost a
fifth of the total and up from 10m in 2012. Southwest is even more
reliant, with two-fifths of passengers paying business fares. But
themark-upovereconomy fares is generally lower than a legacycarrier’s price premium of three- to six-times as much as economy.
For the likes of iag,Lufthansa and Air France-klm, around
25-30% of revenues come from passengers flopping into business-
class seats. A rule of thumb for legacy airlines is that business class
comprises 10% of tickets, but 40% of revenues and up to 80% of
profits. Citi reckons that every 1% fall in business custom knocks
10% off profits. Some airlines are trying to change how they oper-
ate. ba, which is part of iag, is trying to sell business-class seats to
leisure travellers, but it can never charge as much as to a late-book-
ing executive. The secular decline in business travel will mean a
smaller business cabin—and higher long-haul economy fares.
The likelihood that lucrative business travel will rebound more
slowly than leisure is a blow to airlines that depend disproportion-
ately on companies picking up the tab. A permanent decline will
make life harder still. Yet for the executive who has had to spend
weeks of every year on the road the chance to leave the wheelie-bag
in the cupboard more often and settle down in front of a computer
screen instead may come as something of a relief. 7High flyers
The wealthy are not bound by airline schedulesC
orporatejetsare emerging from
covid-19 in better shape than commer-
cial ones. Bosses of big companies and the
super-rich have long relied on owning or
chartering their own small jets. As Jim
Currier of Honeywell, a conglomerate,
points out, business aviation suffered as
much as commercial airlines at the start of
the pandemic, but recovery has been
“steady, consistent and at a higher pace”.
The number of flights undertaken by
scheduled airlines was down by 49% in
2020 on a year earlier whereas business
flights were down by only 24%, according
to WingX, a private-aviation data firm. Mr
Currier expects a full recovery by
mid-2021.
Economic jolts have taken a toll on
business aviation, which had barely recov-
ered from the financial crisis of 2008-09.
Annual sales of new planes fell by almost
half from a peak of 1,200 in 2008 to 700 a
year, as the mood in boardrooms turned
against corporate jets. But a health crisis is
different to an economic one. Chad An-
derson of Jetcraft, which sells new and
used business planes, notes that second-
hand planes have not been dumped on the
market as in the financial crisis. With so
many international flights grounded,
executives and the ultra-rich may be
joined permanently by the merely wealthy.
A new class of private traveller has
emerged that Mr Currier characterises as
those who used to fly first class but,
though they can afford it, have not seen
any value in chartering a private jet. It is a
big step up in price, perhaps five to ten
times, says Richard Koe, of WingX. Yetanecdotal evidence suggests that the
number of “first timers”, who want to
avoid crowds on commercial jets and in
airports, has doubled with covid-19.
Charter companies are doing what they
can to hold onto these new clients by
offering more flexible deals than the long-
term commitments usually required. Mr
Koe reckons that the outcome will be an
industry that provides a more flexible
on-demand service in future. But as priv-
ate jets emit up to 20-times as much car-
bon per passenger as a commercial flight,
the industry will also have to make more
effort to introduce sustainable fuels,
carbon-offsetting programmes, and hy-
brid and electric technology.
The mega-rich may also lead the way to
the next step change in the speed of travel.Supersonic planes could cut journey
times almost in half. Several are on the
drawing board. Aerion, an American firm,
hopes to have an eight-to-ten-seat su-
personic jet on sale by 2025. Boom Su-
personic plans a larger 55-seat all-busi-
ness-class jet.
The latest holiday destination for the
ultra-rich may open the door to even
speedier jaunts. Space tourism may
change travel if the technology to take a
few people to the edge of space can be
developed into hypersonic flights at
mind-boggling speeds. Elon Musk’s
SpaceXhopes to use its giant Starship
rocket to fly 100 people around the world
in the blink of an eye: New York to Shang-
hai in 39 minutes, and for less than the
current price of a business-class ticket.How to avoid the crowds