Five airline industry trends for business travel
The international business travel community currently has its eye on the aviation industry. Partly because it has experienced turbulent times throughout the pandemic, supply shortages, and economic uncertainty. Many travel leaders, such as the CEO of United Airlines warn that it’ll be a while before flying returns to normal.
Like with all uncertain times, the airline industry has faced some changes - with five prevalent trends emerging from the disruption. Read on to find out what they are.
1. Automation is transforming the way people travel
The aviation industry has experienced numerous changes and advancements regarding how airports and airlines operate. The introduction of automation is impacting airlines and airports in many ways, from enhancing safety and efficiency to reducing costs and improving customer experience.
Automation tools such as flight management systems, automated check-in systems, and automated baggage handling systems are reducing the need for manual labor, leading to fewer errors and faster processing. Automated systems also allow airlines to more accurately predict customer demand, which helps them better manage their resources.
Efficiency has increased through self-service check-in, unassisted bag drop, and digitalized bag-tracking.
2. Airports are embracing digitalization
Airports have increased investments in touchless new technologies combined with biometrics. Biometrics are measurements of physical appearance that can be used to identify individuals. Nearly three-quarters (74%) of airports now invest in biometric identity management solutions for passengers to increase safety and efficiency.
Airlines have also adopted biometrics. If you fly Delta through Atlanta and Detroit, your face becomes your boarding pass with “Digital ID”. Facial matching technology can be used to check bags, move through security, and even for boarding a plane at select gates—all without showing a physical boarding pass or government ID. Delta plans to continue the biometric rollout at all its domestic hubs.
Blockchain technology is another exciting advancement in aviation. Blockchain is a method of capturing and encrypting information to share across platforms safely without the risk of hacking. Some ways the technology can be used include tracking baggage, identity verification, automated payments, streamlining loyalty programs, and even managing air traffic. According to Markets and Markets, blockchain use in airlines is projected to grow from USD $421 million in 2019 to USD $1,394 million by 2025.
3. Airport staff shortages aren’t going away
When passengers think of aviation nowadays, they might think of cancellations and delays. The struggle to fly on time is largely due to labor shortages. Travel demand has returned so quickly that the airline industry has been scrambling to hire enough staff to fly planes, serve passengers and unload bags.
Travel disruptions have been particularly notorious in Europe and the United States. From January to July 2022, a total of 128,934 US flights were canceled, which is an 11% increase compared to the same time in 2019. But cancellations are not the full story. When you take into consideration an additional nearly 1 million delayed flights, it’s easy to see the severity of the supply shortage on business travel.
The chaos has led to a decline in some road warriors’ loyalty to airlines and even caused some frequent corporate travelers to change jobs that require less travel. To prevent business traveler burnout learn how corporate travel technology provides automated alternative flight options and real-time notifications to mitigate travel disruption.
Meanwhile, some airlines are looking for creative ways to attract qualified staff. For example, Alaska and United recently opened flight training schools and offer financial aid to help cover the $70,000 cost of becoming a pilot.
If staff shortages weren’t enough, the two major airplane manufacturers, Boeing in the U.S., and Airbus in France are having supply chain issues that threaten to leave the global airline industry with airplane shortages. Airlines are watching Boeing and Airbus closely as they attempt to modernize their fleets and meet current demand.
4. Sustainability is a priority for global airlines
International air transport association (IATA) members’ pledge to achieve net-zero carbon emissions by 2050. Fuel efficiency is a key component of sustainable travel for airlines worldwide. Airlines can reduce their carbon emissions by using sustainable aviation fuel and improving the efficiency of their engines. Biofuels are renewable and more environmentally friendly than traditional aviation fuels and using them can help airlines achieve their sustainability goals. However, the industry still faces significant challenges in terms of scaling up production, cost-effectiveness, and infrastructure. United Airlines is the first U.S. airline to invest in a biofuel refinery to reduce their emissions further.
Reducing waste is another priority for the major airlines. Every year airline travel is responsible for approximately 5-7 million tons of single-use plastic waste including headsets, food trays and plastic water bottles. Fortunately, airlines are beginning to take steps to reduce their plastic waste. Some airlines, such as Lufthansa, offer passengers a reusable metal cutlery set for a small fee. Other airlines, such as Delta airlines have pledged to remove or recycle single-use materials on their flights.
5. Corporate travel isn’t returning to “business as usual”
As travel restrictions from the covid-19 pandemic have decreased corporate travel has exceeded expectations in its rate or return. According to a survey conducted by the Global Business Travel Association, travel managers estimate corporate domestic travel volume in 2022 is 63 percent of what it was in 2019, while corporate international travel is back to 50 percent of pre-pandemic levels.
Even as air travel returns, high inflation and economic uncertainty inevitably will tighten corporate travel budgets. The uncertainty in the foreseeable future means airlines will continue to provide greater flexibility for passengers.
Airlines have become increasingly flexible with their cancellation policies as they seek to remain competitive and provide customers with the best possible service. In the past, airlines would often require customers to pay large cancellation fees if they had to cancel their flight, however, these fees have been reduced and some airlines have even started offering free cancellations. This is especially beneficial for travelers who need to adjust their flight plans due to meetings or other business commitments.
What’s next for your company’s flight booking process?
As you navigate corporate travel there are tools and strategies available to reduce the chaos and costs. The business travel industry has quickly learned that uncertainty demands holistic and agile solutions. To better meet the satisfaction of employees and reduce costs companies must shift their business travel mindset to be data-driven, strategic, and flexible. Choosing a corporate travel solution that fits the needs and culture of a business is no easy task. Learn how Egencia can support your travel program during times of uncertainty here.