For the past three years, U.S. airlines have experienced a travel surge, yet until the recent quarter, high-spending corporate travelers had been notably absent.
However, these clients have now returned in full force, bolstering profits for airlines during what is typically a sluggish quarter for financial performance. Notably, major U.S. carriers such as Delta, United, and Alaska Air have reported a significant uptick in business travel.
Alaska Air, for instance, highlighted a notable increase in spending by tech giants like Amazon and Microsoft during the March quarter, bringing corporate travel revenue back to pre-pandemic levels.
This surge in corporate bookings has propelled the Seattle-based carrier to a robust performance, particularly during a period traditionally considered its weakest.
According to Shane Tackett, Alaska’s chief financial officer, the demand for corporate travel is expected to continue rising, especially as technology firms, particularly on the West Coast, continue to recover. He emphasized the significance of these companies in the global market, noting their necessity to travel for client meetings and software sales.
Similarly, United Airlines reported a surge in corporate bookings this year, driven by increased demand from professional services, technology, and industrial sectors. An internal memo revealed some of the largest corporate bookings in the airline’s history.
Before the pandemic, business trips accounted for a significant portion of passenger revenue for U.S. airlines, representing up to half of total revenue, according to Airlines for America.
However, the slow recovery forced airlines reliant on business traffic to adjust their strategies, with a focus on leisure travel to compensate for the downturn in corporate bookings.
This involved network restructuring and catering to vacationers in key leisure markets, such as Florida and Las Vegas, while also renegotiating contracts with major corporate clients.
