Business class airline seats are becoming more attractive to everyday travelers who want to cruise on a flight. This is driving up demand and prices. So corporate travel budgets may need a boost in 2023.
The CEO of Air France said: “We see a strong new type of customer, which we call a ‘luxury cheap’ customer,” writes my colleague Vivienne Walt in a recent one. wealth feature article. “Summer ‘luxury leisure’ travelers complicated things for those on true business trips,” Walt writes. “With the most expensive seats, suddenly the hottest tickets in travel, business people were forced to change routes, reschedule meetings or – horrors – fly economy.”
“It was like a The Hunger Games Crash if you need to take a last-minute trip,” said Walt Henry Harteveldt, industry analyst for global travel market research firm Atmosphere Research Group in San Francisco. “You can’t get a last-minute ticket. in business class, even if you were a businessman and didn’t worry about the fare,” Harteveldt said. “There were just no seats available.
Some drivers may not be willing to trade business class benefits for a middle seat in a coach squeezed between two passengers. Sydney-based management consultant Dhruv Sharma told Bloomberg his budget couldn’t stretch to business class, the usual choice, to fly colleagues to a team meeting in Bangkok without doubling the price to $6,000 per person. Sharma had to choose economy tickets. As a result, it offers those who take the trip to Thailand a break when they return. “However, he expects 20% of colleagues to withdraw because they will be flying trainers,” according to Bloomberg.
In North America, business travel fares will surpass pre-pandemic levels by the end of 2022, according to a report from CWT, a travel management company, and the Global Business Travel Association (GBTA). In 2022, premium class (business and first class fares) will grow by 45.2% globally. And in 2023, an additional 6.2%.
What could tighten the corporate travel budget could benefit the airline industry. “The race for the highest-priced seats has been a huge boost throughout the industry as it has been hit by the two-year pandemic,” Walt writes in it. wealth piece.
“Data on how much business and first class cabin bookings have increased is scarce as most airlines keep these specifics confidential,” she wrote. But in June, Delta said that emerging from the pandemic downturn, ‘premium product revenue recovery exceeded [the] flagship booth in all markets.’ Like other airlines, Delta benefits from fliers using their mileage points, with banks and credit card companies issuing payments to carriers that reward rewards. The airline said in June that it earned $1.4 billion from American Express in the last quarter. (The full article can be read here.)
Some companies are beginning to respond to rising airfares with “smarter and more intentional travel policies”, rather than restricting travel to the cheapest class for cost savings, according to the CWT and GBTA report . These companies are seeing business travel more as a strategy to achieve higher business objectives than just a trip to meet a client or colleague in person.
What is your approach to business travel and cost savings? Let me know.
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
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Big deal
According to a recent Gallup report, hybrid work — one part of your week in the office and one part remote — is quickly becoming the new normal for many employees. A key finding is how hybrid workers spend their time onsite versus at home. The report found that when in the office, employees prioritize collaborating with colleagues, connecting with their manager and using technology that is only available at that location. Managers should encourage employees to connect with colleagues from different teams and also help employees be intentional about their time, Gallup noted. “Conversely, forcing everyone in the office to just take Zoom calls and do independent work tasks they were doing from their living room in pajama pants is not going to be a welcome use of time” , the report says. The findings are based on a survey of a nationally representative sample of 8,090 skilled remote workers.
Courtesy of Gallup
Going deeper
“Million-dollar bonuses aren’t enough to stop the C-suite exodus after a CEO leaves,” a wealth The report, by Lila MacLellan, found that companies see immediate C-suite turnover when the CEO leaves. “The threat of C-suite exits creates additional pressure on a corporate board: Not only must directors appoint a new or interim CEO, they must also retain as many top executives as possible to to make the transition seamless,” MacLellan writes. The report explains how boards can prepare for potential leadership gaps.
Leaderboard
Cecilia Jones was appointed CFO at Agios Pharmaceuticals, Inc. (Nasdaq: AGIO), effective September 26. Jones will replace Jonathan Biller, the company’s previous CFO and head of corporate affairs, who resigned to become a chief legal officer of Vertex Pharmaceuticals. Jones joins Agios from LogicBio Therapeutics, where she served as CFO. Prior to her role at LogicBio, she spent more than 10 years at Biogen in roles of increasing responsibility within the finance organization. Most recently, she was vice president of R&D, worldwide medical finance and business development. Previously, she served as senior director of corporate finance. Prior to joining Biogen, Jones was director of international finance at Genzyme.
Stephen Johnston was named CFO at Ideanomics (Nasdaq: IDEX), a global company focused on accelerating the commercial adoption of electric vehicles, effective immediately. Prior to joining Ideanomics, Johnston served as CFO of Dura Automotive Systems, a global automotive supplier. His finance experience spans the automotive manufacturing and engineering industries with national and global companies such as Tower Automotive and Nexteer Automotive.
Tapped
“Now [baby] Boomers spend their days watching cable news, breaking politics and chasing power. Not all, of course. But for so many, to go from ‘fighting man’ to being everything that was hated in the ’60s and ’70s is disappointing.”
– Billionaire entrepreneur Mark Cuban said on Twitter on Monday. Cuban followed up on his latest commentary on his perceived generational differences on social media.
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