Business travel rebound

I’ve been saying for months that this is a year of recovery for our industry, and I wanted to share something that gives a little anecdotal evidence that we are indeed seeing a rebound.

I’m traveling right now myself - on vacation - but clearly there are those who are seeing business travel returning as well.

Take a look at this short video clip from a travel correspondent who attended last week’s National Business Travel Association (NBTA) international convention.

photo

Speaking of business travel, Continental Airlines featured its new BusinessFirst seats in a 787 Dreamliner display at the NBTA convention. This 787 mockup is now on view at Continental’s Houston hub in Terminal E of Bush Intercontinental Airport. (Continental Airlines photo)

The video clip from the NBTA convention gives you a good idea of the view from those in the industry seeing the recovery in terms of increased load factors right now - airline executives and other travel managers.

In this case, they’re talking specifically about business travel, but their observations are a good barometer for all passenger travel.

Do you think travel is making a comeback?

Comments (6)

Vero Venia (Montreal, Canada):

Do you think travel is making a comeback?

Well, it is making a comeback from a very-very low level in 2009. If my rough estimates are correct, the traffic measured in RPK is not yet at 2008 level. In other words, the RPK curve has been shifted to the right by about 2 years.

I am not convinced that air travel will grow as fast as it did during the last two decades (1990-2009). My rationale is quite simple. Despite the fall of the Iron Curtain and despite the astonishing economic growth in the 90s and 2000's, the average annual growth during that period was "only" around 4.5%.

We are entering a period of low GDP growth. The population in the Europe and in North America as well as in Japan is getting older as I discussed in my blog entry here.

Okay, this year traffic growth will be in the high one digit percentage, but in my opinion the average RPK growth will be only about 3.6% per year during this decade.

The above being said, I think regional market will grow more than the other market segments. That's the market for short-range narrowbody aircraft. Boeing latest CMO also reflects this possible trend.

Kinbin (Taipei Taiwan):

Let us not forget that we are observing an industry swing and an inudstry pendulum at play. Comparisons are being made with an annus horribilis of 2009.

If we are to subscribe to the hawkish economic views of the economist Paul Krugman, articulated in his columns at NYT, which I happen to, then the US ought to expect a decade of Japanese-like low economic growth, high unemployment and tighter spending habits that will limit air travel growth. The analyst Richard Aboulafia presents a compelling case as well in his blog.

With the recent air traffic growth numbers and airlines financial growth numbers for Q2 looking upbeat, albeit compared with a depressed datum from 2009, airlines are increasingly keen to restore capacity growth as well. If unchecked, this misguided euphoria will lead to further self-induced financial suicide for the airlines and the supply chain, as growth sputter and air travel languish.

Norman (Long Beach, California, United States):

Business travel is certainly making a comeback, the last few times I flew, most of the seats where taken, I have even noticed that travel to leisure destinations like Hawaii have nearly full business class cabins.

Don Harrington (Bellevue, WA):

Randy;

Based on the last trip I took, yes. The 767 to Hawai'i was PACKED.

Vincent Lucero (Everett, WA):

From the recent headlines regarding air travel, I would tend to agree that travel volumes are up although I haven't flown anywhere in a while (too much work to be done on the 787!).

While we can do a lot to improve the comfort and quality of the flying experience inside the aircraft, the area that drastically needs improving in the overall flying experience is going through security at the airports.

The last few times I have flown with my two young sons the TSA personnel made me feel like a criminal for wanting to fly. This, more than the cost of travel, is a strong deterrent for me and my family. It can change my decision between flying or driving to one of driving, especially if the distance can be covered in a day.

I suppose regular business travelers have come to expect (and ignore) this lousy experience, but for those of us fly for leisure it is not as easily ignored and leaves a bad mark on the overall flying experience.

Scott (Phoenix):

The most dreadful part of travel is the airport. You have to get there hours earlier than scheduled flight, you are subjected to lines of people that are all terribly confused by the whole check-in process.

You have to then deal with the TSA x-raying your baggage and then digging through it and not packing it back up. And this is all before you even get to the gates.

Prior to getting to your boarding gate you get accosted by more TSA folks that give you the stink eye while "examining" your passport or driver's license (don't get me started on the use of a passport for domestic travel).

Once you have been given the blessing to stand in line for the next round of x-ray screening you get to undress. Belt off, jackets off, shoes off (only if you don't want to be subjected to additional screening, its not mandatory... Yeah, right), computers in a gray bin, bag in a gray bin, shoes in a gray bin, jacket in a gray bin, jewelery, wallet, glasses, cell phone, mp3 player, in a little bucket.

And then its your turn to walk through the metal detector. Make eye contact with the TSA agent on the other side and walk straight through. The alarm goes off and your subjected to a wanding. While undergoing the additional screening your stuff in the gray bins gets pulled aside and rummaged through by no less than two more agents. When given the all clear your left there standing with arms full of your belongings. Like you just got kicked to the curb.

Is air travel on the comeback, I don't know. The truly sad part of it all is how much I like flying in Boeing products. To bad it is no fun getting to the aircraft.

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