The global health crisis has undoubtedly shaken up the aviation industry from top to bottom. A market that was expected to suffer the most was business travel. Yet, it is a segment within this field that has supported regional operations to maintain strong levels of activity. Simple Flying recently caught up with ARC VP Global Sales, Marketing Operations, and Customer Experience Steve Solomon about these passenger trends since the rise of the pandemic.
ARC prides itself on being an industry leader in air travel distribution and intelligence, offering channel-agonistic tools and insights to help the travel community to connect and develop across the globe. Notably, the firm is a go-to airline settlement solutions provider, handling over $97 billion in transactions between carriers and agencies in 2019.
The company has seen the average ticket price for fares fluctuate amid the ever-changing conditions of the market. There was a notable drop in US economy domestic fares last summer, falling 28% between July and September. However, there was some consistency heading into the new year.
Business is doing well
One department that has been adding to the stability of the domestic and regional airline industry is business travel. While corporate travel is doing its best to adapt to the situation, it is the SME sector has been the backbone for the last couple of years.
“There is resilience through these variants and people are still looking for ways to safely travel. The small to midsize enterprise segment has been on the road this whole time. It’s more regional travel. It’s the manufacturer or distributor who has customers within a one or two-hour flying radius. Those folks have been in the air throughout the pandemic and they are just keeping the supply chains moving. They’ve been traveling and you just have to do some investigation to see that,” Solomon told Simple Flying.
“In talking to corporate buyers, it was reassuring to see how much value and focus they have on the duty of care. They were really taking a lot of the lessons learned coming out of the pandemic to make sure that their travel programs were really ready for the next stress. So, a lot of plans and investments have been made during the pandemic for the buyer community to really ensure their travel programs are working the way they want them to.”
Solomon notes that these companies are looking for new technology to invest in and make their programs more transparent and efficient for the traveling population. The continued investment in travel tech to support the market is promising for the rebuilding of the industry.
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A while to go
Altogether, despite the exciting trends, the 2021 corporate agency channel transactions were forecasted to be 43% lower than 2019’s levels. The figure is expected to be 25% lower than 2019 by the end of this year. Overall, current projections anticipate pre-pandemic corporate agency channel levels by late 2026.
ARC concludes that as the population around the world gets vaccinated, there will be increasingly flexible border rules. Unless new variants have a long-term effect on society, international markets such as North America to Europe will be far healthier this summer than last year. All in all, International travel will be woken up like how domestic segments were in 2021.
What are your thoughts about the impact that business travel is having on regional travel? What do you make of the trends in passenger activity since the start of the health crisis? Let us know what you think of the overall situation in the comment section.