Here’s how long business travel will take to recover completely
The U.S. airlines cancelled another 1,800 flights on Monday as winter storms and Omicron continued to aggravate staffing shortages. This was on top of more than 5,000 cancellations over the weekend.
What’s next for business travel?
According to CNBC’s Phil LeBeau, Omicron could threaten the recovery in corporate travel in the near term. Reporting on flight cancellations on “Squawk on the Street”, he said:
Near term, business travel will get pushed out even further. When you talk with the airline executives, they say it’s going to be a little more of a challenge than we thought it would be in terms of corporate travel.
LeBeau expects business travel to pick up in the second quarter of 2022, once this new wave of COVID-19 is over and employees return to offices. But he clarified that numbers will still be down significantly from the pre-pandemic levels.
United Airlines is paying thrice as much to pilots for picking up an extra flight this month to tackle staffing shortages.
Citi analyst’s outlook on the return of corporate travel
Stephen Trent – airline analyst at Citigroup, also agrees that Omicron will primarily hurt business travel in the near term. In a separate interview, he said:
Omicron could have a modest, short-term impact on the space from airline employees being forced to go through a 5-day quarantine when they get infected, and some impact on demand. At this juncture, it’s going to be primarily managed business travel as the main piece that’s affected.
Trent doesn’t expect corporate travel to return to the pre-pandemic levels before 2024. His view is roughly in line with the CEO of American Express, who also forecasts business travel to take another two years to recover completely.
U.S. airline stocks are still trading up on Monday, indicating investors had already expected Q1 to be taxing for air travel.
The post Here’s how long business travel will take to recover completely appeared first on Invezz.