American Express Global Business Travel has been among the more vocal advocates for a thoughtful restart of business travel. Chief commercial officer Drew Crawley lays out the knock-on effects should the sector fail to recover.
America pioneered “aviation for all,” democratizing flying to open new opportunities for millions and help spread prosperity across the nation. Getting business travel moving again is critical to preserving those gains.
More than 40 years ago, air travel was an exclusive affair: Relatively high fares meant flying was largely restricted to people with higher incomes. Then, thanks to deregulation, fares began to fall. As advances in airplane technology and a digital revolution turbocharged competition, the average cost of an airline ticket halved.
Cheaper fares, and an explosion in the number of destinations served by airlines, made flying from A to B in the United States as commonplace as getting on a bus. As well as joining communities and families, greater connectivity opened once underserved regions for investment, spurring economic activity and growth across the entire country.
Looking internationally, “aviation for all” made the world a smaller place and allowed more Americans to travel overseas for business and leisure; in 2019, almost 45 million did. The scale of the rise in international travel can be gauged by the massive growth in the number of U.S. citizens holding a passport. Thirty years ago, it was just 3 percent, according to U.S. government data. By 2017, it was 42 percent.
‘Aviation For All’ At Risk
Covid-19 now threatens to reverse the great gains that came with the democratization of air travel, making flying less affordable and shrinking the dense route network that keeps the nation connected.
For one, the financial pressure on airlines – left reeling by the sudden shutdown of air travel – is likely to make flying more expensive. Even with a limited recovery over the summer, U.S. airlines are dealing with a massive decline in business. Year-over-year passenger numbers are down 65 percent on domestic flights and 83 percent on international routes.
Measures to make air travel Covid-safe — at the airport and onboard planes — are proportionate and welcome. But deep cleaning, longer boarding times and slower turnarounds will drive up operating costs for airlines. Eventually, this will feed through to ticket prices.
However, the biggest threat to cheaper fares and connectivity comes from the shutdown of business travel. Airlines base their business models around business travelers prepared to pay a premium for extremely flexible fare options and a higher level of service. Making up only 10 percent of passengers, business travelers drive the lion’s share of airline profits. Without them, airlines would be compelled to raise fares for everyone.
Higher fares are only part of the story. Under pressure to maintain margins, airlines will begin to redraw their route networks, reducing service to secondary and regional airports. With fewer, more expensive air options and reduced access to customers and markets in the United States and overseas, economic prospects could look bleaker for many regions.
Clear Business Travel For Takeoff
The age of aviation for all need not enter terminal decline. By getting business travel moving again, the infrastructure that made flying affordable for every traveler can be quickly restored and connectivity preserved.
The airlines are doing a good job building traveler confidence with multi-faceted health and safety initiatives, including “touchless” travel. Federal guidance on safety protocols and standards throughout the entire journey would accelerate this process to restore traveler confidence in flying.
Restoring international air travel is more challenging. Governments need to work together to remove the restrictions and uncertainties that deter travelers. For business travelers, quarantine is the biggest obstacle. The possibility of being stranded means it’s not worth taking the chance. The self-policing nature of quarantines also does very little to mitigate risk. These measures must be removed now and replaced with rapid, pre-departure testing. The infrastructure is there; we just need the political will.
It’s already happening in some places. Data-led schemes show that a controlled approach works. These include Singapore’s Safe Travel Pass, which enables essential business travel to and from China, Malaysia, New Zealand and Brunei, and the recently introduced CommonPass initiative trialed by Cathay Pacific and United Airlines. Recognizing how fundamental travel and trade are for its prosperity, Japan has also eased restrictions for business travel. The U.S. and U.K. governments need to learn from their economic allies. A quarantine-free New York-London air corridor, with an appropriate pre-departure testing regimen, would reopen the biggest intercontinental air route in the world and restore a vital trading link for both countries.
The “Nylon” pilot could demonstrate that business travel is safe and that risk can be managed. It could provide the basis for a progressive, evidence-led return to the skies. But before that can happen, we need governments on both sides of the Atlantic to work together to agree on consistent traveler safety measures. We know the demand is there and waiting to be released: when Covid-safety rules are clear, travelers are ready to fly. In China, more people are taking domestic flights now than in 2019. With leadership from governments, we can clear business travel for take-off.
Flying Can Stay Open For Everyone
The democratization of air travel is one of the great achievements of our civilization. It has opened new horizons for millions of people, spread prosperity at home and overseas, and brought the world closer together. Covid-19 struck a terrible blow against this progress. But with the managed pathway set out by the business travel industry and supported by concerted government action, we are confident that “aviation for all” can begin its return.
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