Blue Skies Ahead: Factors Shaping Air Travel and Pricing in 2022
Wednesday, 24th November 2021

Amidst a healthy job market in many countries and changing attitudes to work-life needs and sustainability, travel buyers need to look at how to balance the desires of their staff with budgeting and building their travel programs.

While many are keen to travel again - Ernst & Young’s Work Reimagined survey found that 67% of respondents across 16 countries would like to travel for business moderately to extensively after the pandemic – we’re still in uncertain times.

The GBTA CWT Global Business Travel Forecast 2022 released this week looks at the cost of travel and the trends shaping the future of business travel. Here are three things to look out for when planning your program.

Pent-up demand for leisure travel

After 18 months cooped up at home and with cash saved up, vacationers (where restrictions have lifted) are keen to get back on the road.

In normal years, summer leisure demand is replaced by business travel that typically picks up in the fall as leisure travel dissipates. This trend was not the case in 2021, with some travel being delayed until 2022.

Pandemic legislation could increase fares on some routes

“Infection rates and legislation around whether people can come in and out of countries will impact the ability for airlines to plan around load factors, schedules and capacity,” says Richard Johnson, Senior Director CWT Solutions Group.

A surge in bookings caused by changed entry requirements – as seen in the US in November – will require swift capacity increases and present price inflation opportunities by airlines.

Australia is a current case-in-point. Airline seat capacity was off 68% in early November 2021 while at the same time prices rose significantly, driven by a mismatch of Australians unable to travel for more than 18 months and a strict cap on entering the country.

Rail as an alternative to short-haul flying

Climate-conscious travelers may prefer rail over short-haul flights in increasing numbers. France has already moved to ban domestic flights on routes that can be traveled by train within two-and-a-half hours. There’s the additional consideration of end-to-end travel time. A short haul flight may take an hour but factor in taxis to and from an out-of-town airport and check-in times, and rail may prove the more attractive option, particularly in Europe.

So far the shift to rail has happened where it serves as a good alternative to air travel. High-speed rail projects – currently with long lead-times – could boost demand. It’s possible that the introduction of new lower cost services on existing lines may cause downward pricing pressure in some markets. Many European operators have plans to launch services outside their home markets.

Read the full forecast here.

By Emma Woodhouse
Global Corporate Communications, CWT

This article first appeared at the CWT blog. Reprinted with permission

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