Ticket prices in business class have gone up. Companies save on employee travel

Ticket prices in business class have gone up. Companies save on employee travel
Ticket prices in business class have gone up. Companies save on employee travel

Not everyone can afford to fly in business class. Now even companies often can’t afford them. A return ticket on the longest routes, for example between New York and Sydney, can cost more than $20,000 (CZK 469,000). This is roughly double what it was before the pandemic.

“However, demand is clearly outstripping supply,” Nick Vournakis, executive vice president of CWT, a full-service travel company, told Bloomberg. “At some point, corporations will say enough is enough,” he added.

According to data from CWT and the Global Business Travel Association, air fares will increase by 45 percent in 2022 compared to 2021, and will increase by another 6.2 percent in the coming year. According to a representative of the company TripActions, the prices of business class tickets from the US jumped by as much as 52 percent between January and August.

Travel uncertainty is bad news for airlines. According to data from Trondent Developmen, business class passengers represent 75 percent of the carrier’s profits, despite the fact that these passengers make up only 12 percent of all passengers.

“We’re seeing (companies) pay a lot of attention to spending,” said Marcus Eklund, chief executive of corporate travel management company FCM.

For example, management consultant Dhruv Sharma, who works in Sydney, was researching airfares for his staff team meeting in Bangkok. It turns out that the price of a business class ticket has doubled to $6,000 per person. “It must be economy class,” he declared. Even so, he expects that some of his colleagues will eventually not fly to the team meeting due to traveling in a different class.

Billionaire Bill Gates predicted at the end of 2020 that more than 50 percent of business trips will disappear after the coronavirus. During the pandemic, people got used to solving many things remotely, for example through video calls.

I’d rather pay people

“We’ve almost stopped traveling,” said Purnima Thakre of Boston-based consultancy Refine and Focus, which works on projects around the world. “I’d rather pay people than spend money on plane tickets,” she says.

According to travel portal kayak.com, Delta Air Lines and British Airways are charging more than 10,000 US dollars (234,000 CZK) for a return flight between London and New York in business class next month.

A return trip on the Sydney-London route with Singapore Airlines will cost approximately USD 12,000 (CZK 281,000). Qantas and United Airlines want more than USD 22,000 (CZK 516,000) for premium seats on the New York-Sydney route.

“More than ever, corporations are choosing flights based on price rather than loyalty offerings, in line with their budgets,” said Martin Ferguson of travel and meetings management company American Express Global Business Travel.

According to the Global Business Travel Association, a return to pre-pandemic business travel spending will not occur until 2026. That is two years later than the association expected.

The article is in Czech

Tags: Ticket prices business class Companies save employee travel

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