Moody’s – Global business travel unlikely to recover before 2024

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Airlines will suffer as the COVID-19 pandemic fuels global business travel uncertainty, with recovery unlikely before 2024 as virtual meetings may replace travel, Moody’s Investors Service said in a report published this week.

Business travel is expected to recover slowly as workplaces gradually re-open and demand picks up, but improving technology, company cost reductions and environmental concerns could put pressure on business travel over the coming years.

“Global business travel is unlikely to make a full recovery before 2024, especially with the use of virtual meetings as an ongoing substitute. Around 20%-25% of business travel involves meeting people from within a company’s own organization – these trips are most at risk of being replaced,” says Martin Hallmark, Senior Vice President at Moody’s Investors Service. “To offset the possible negative impact, we expect airlines to manage their capacity and to benefit from efficiency savings and cost cuts.”

Full-service carriers such as Delta Airlines, United Airlines, American Airlines, Lufthansa, and British Airways will be most affected by the slow pick up in business travel. There will be different paces of recovery for business travel, with stronger demand in large countries where there is substantial domestic travel such as the US, Brazil, Australia, Russia and China.

Sectors with a lot of site-specific activities such as manufacturing, real estate and construction are also likely to recover sooner and see faster growth in business travel after the pandemic, especially in countries such as China, Japan and Germany.

Main Photo: EPA-EFE/CATI CLADERA

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