After nearly two years of lying almost entirely dormant, the oh-so lucrative business travel segment is beginning to bounce back in earnest. Meanwhile, this might be a temporary effect of the pent-up need to reconnect in person to partners that have only been available through video calls and the constant negotiation of the unmute function. As major corporations look to reduce emissions, business travel might very well get increasingly bumped.
Recovery set to slow?
Before the pandemic hit, corporate travel was a $1.4 trillion industry. Recently, airlines such as United and agencies such as American Express Global Business Travel have positively adjusted their financial outlooks as corporate travel demand has come back at a quicker pace than previously anticipated (apart from the transpacific sector).
However, a new Business Travel edition of the Airline Sustainability Benchmarking Report 2021, prepared by CAPA – Center for Aviation, and international carbon reduction strategy and investment management company Envest Global, suggests that this may be a temporary surge. It states that the overall recovery of business travel will be diluted as companies are increasingly pushed to meet emissions targets.
United Airlines has upgraded its outlook for Q2 as it continues to see a recovery in corporate sales. Photo: Vincenzo Pace/Simple Flying
Saving emissions – and cash
The need for long-haul travel, accounting for 40% of aviation’s emissions, and particularly premium cabin tickets, will become increasingly scrutinized. Not to mention the discovery made by CFOs everywhere of how much money can be saved when cutting down on employees jetting about the globe.
In the report, Envest Global has identified a consistent emerging pattern. Out of the over 100 corporations that are among the most prominent corporate travelers globally, one-third have set emissions reduction targets. These are to be hit somewhere between 2025 and 2030, a long time before sustainable aviation fuel will become sufficiently available or zero-emission propulsion technologies a commercial reality.
The consultancy’s Executive Director for Advisory, David Willis, said that companies are being held increasingly accountable by ESG report concerned investors to make sure they hit sustainability targets. This means that the airline industry will be facing a real challenge as those pressures increase. This is another reason why genuine sustainability efforts make perfect business sense for carriers – corporate travel managers will be seeking the greenest carriers for their clients.
Corporations will increasingly look to have their employees travel on the airlines with the strongest sustainability initiatives. Photo: Getty Images
The EY case study
Looking to reduce emissions by cutting way down on corporate travel is EY (previously known as Ernst & Young), one of the world’s largest professional services firms and, in 2019, the seventh-largest private organization in the US. Speaking at the CAPA event ‘Airlines in Transition 2022’ earlier this year, the company’s global head of travel, meetings & events, Karen Hutchings, said,
“We have set a target to reduce business travel emissions by 35% by 2025. Whilst we are seeing our people travel now, we don’t anticipate it sustaining for a long time because we ultimately do have these targets that we have to achieve.”
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