As corporate travellers get back to international flying, many will be looking for the extra reassurances that come with premium services, says Gary Noakes
After an 18-month hiatus, business travel really does appear to be coming back. Thanks to the vaccination programme, the wiping of the red list and the long-awaited reopening of the US, it’s time to fly again.
The tentative return is being reported from TMCs, buyers and airlines, with no shortage of willing participants. In June, a survey by SAP Concur of 500 UK corporate travellers and 100 travel managers found 99% were willing to travel in the next 12 months and 65% actively wanted to.
In an October poll by the GBTA, 70% of members said they expect to see an increase in international business travel over the next six months as a result of US borders reopening. But the enthusiasm is tempered by budgets and safety considerations, so there are mixed messages emerging.
Meon Valley Travel Group straddles both the corporate and leisure sectors. Managing Director James Beagrie says an initial surge in bookings came from the leisure sector, with a high enquiry to conversion rate.
“Leisure bookings are corrupted by people going where they can. With business travel, people are waiting until they can go where they need to go. Generally, companies are saying we will start from next quarter. It’s the finance chief driving the decision,” he says.
“Rather than people spending more, it’s a case of firms starting at the top of the tree – the chief executive is travelling first.”
There is a high priority on traveller safety, he says, with “end to end care” in the shape of “a chauffeur from the house, being walked through the lounge, business class flights, booked meeting space”, which means transaction spend is more.
However, he adds flights are fuller “because there are fewer of them: BA has got rid of 40% of its fleet, so availability evaporates”, with consolidation of poorly-sold departures adding to this issue.
A fine balance
According to Tom Maynard, Virgin Atlantic’s recently-appointed Head of UK and Europe Sales, the vast majority of the airline’s corporate travel is still in Upper Class.
“Around 70% of revenue we get from TMCs is in the Upper Class cabin,” he explains.
“Yes, we have seen some corporates downgrade from Upper to Premium and we’ve seen it happen the other way. I think it’s going to be interesting to see what is driving the decisions. It will be a balance of price, wellness and sustainability. I think wellness is playing a big part in those decisions to upgrade.”
Many are predicting that corporates will be asking their executives to take fewer, longer trips, particularly when travelling long haul, to make their travel count.
“I think it’s too early to see now but talking to a lot of our corporate customers that’s certainly an intention,” says Maynard.
“Rather than limiting internal travel and focusing on external travel, I think it’s going to be a case that if you’re going to do a long-haul flight, you’ll go for a whole week and do as many meetings as you can in that week, and rather than going every month, you’ll perhaps only go once a quarter.
“Some customers are saying they expect their travel budget to stay relatively similar but it will be a different type of travel, so travellers can fly business class and maybe upgrade their policy and have more hotel expense, but they’ll do fewer trips throughout the year.”
Bob Schumacher, United Airlines UK and Ireland Sales Director, says on some of the airline’s departures, premium customers outnumber those in economy: “We are in nose-heavy flying posture,” he says.
“What we’re finding is airplanes are flying quite heavy and not with the traditional global corporates, but with SMEs and a significant amount of high-yield leisure and mileage burn, so we’re getting heavier loads in the front than in the back, both in business and in premium economy.
“There’s also probably some desire by travellers to have a bit more space.”
“Health and safety benefits of business and first class have attracted travellers from all levels of seniority over the last two years”
Julie Cope, Managing Director TakeTwo Travel Solutions, concurs with clients seeking reassurance in spaciousness. “From a duty of care perspective, our corporate customers are questioning whether they should adapt their travel policy to allow employees to travel in premium cabins for social distancing purposes,” she says.
“Covid isn’t going away any time soon and will continue to impact on a corporate’s duty of care and risk management. It’s a dilemma for corporates. Should they increase their travel budget or should they do fewer trips? Should they send one employee on the trip instead of three?”
Cope adds that pre-Covid, travel policies were built primarily around cost, with premium cabins permitted if a flight was longer than eight hours, but she says, “that decision is no longer black or white”.
Apart from increased fares, allowing more premium flying brings another challenge, that of sustainability, as it costs more to offset a business class flight.
Cope says customers are asking to review different scenarios to understand the cost implications of changing policy. Another question being considered is how long that change should be for and whether it should be permanent.
“If their company is aiming to become carbon neutral, then should they really be booking business class at all? It’s something that corporates are looking at carefully. But as yet there is no straight answer,” she adds.
Midas Travel Director Nicola Cox says the health and safety benefits of business and first class have attracted travellers from all levels of seniority over the last two years and many clients have flexed travel policies to accommodate this.
“Premium travel has always been about the door-to-door experience, so for our clients this is largely unchanged,” she says.
“The pandemic has, however, brought about a wider spread demand for some of these services, with more people across the business booking chauffeurs, meet and greet and luggage pick-ups.
“In terms of the actual flight, clients have become more interested in the specifics in terms of safety, with an increased preference for individual seating in business class and opting for a Boeing 787 over an older 777 based on the enhanced filtration system.”
Travellers returning to the skies could be forgiven for thinking that with the world’s airlines mothballing fleets for 18 months, little has changed onboard. True, there has been a freeze on spending for some carriers, but refurbishment of premium cabins is now back on the agenda.
United Airlines is typical of carriers that placed a hiatus on expenditure during the pandemic. “That slowed down the loading of our Polaris cabins across the fleet,” says Schumacher. “We hope to have the whole international fleet complete by Q4 next year.”
Meanwhile, United operates flights with a “High J” configuration on routes from Heathrow to Newark and Chicago, with 46 of the new Polaris semi-enclosed seats as well as the Premium Plus cabin.
United and other transatlantic carriers found some new competition during the pandemic in the shape of JetBlue, which launched services from JFK to Heathrow and Gatwick in the summer. It’s a disrupter, particularly at Heathrow, via its use of the new generation single-aisle Airbus A321LR (Long Range), which burns less fuel giving JetBlue a significant cost advantage.
Business travellers who balk at the idea of single aisle aircraft for long haul will probably raise fewer objections when shown JetBlue’s Mint business cabin. The 24 suites offer fully flat 6’ 8” beds enclosed by a sliding door, all with aisle access and 17” TV. At the front, two larger Mint Studio seats boast a companion seat and 22” TV. It’s not quite a private jet, but it has some of the feel of one.
“We are in nose-heavy flying posture. We’re getting heavier loads in the front than in the back, both in business and in premium economy”
Two other transatlantic carriers, Aer Lingus and Air Transat, also have the A321LR. The Irish carrier’s new venture, Aer Lingus UK, plans to base two at Manchester, offering non-stop US flights. The daily year-round JFK service begins on December 1 using the A321, offering 16 lie-flat business class seats that are 6’6” long and 22” wide. Most are in pairs, but there are some single seats that will appeal to solo travellers.
JetBlue’s rivals will probably stress the amount of space to be found on their wide-body fleet. Regular fliers in Virgin Atlantic’s Upper Class had to forgo the use of social spaces on the aircraft during the pandemic, but the good news is these are now open again. On the new Airbus A350 fleet, The Loft replaces the bar, whose sometimes noisy clients were the curse of a business traveller trying to sleep. The Loft now provides a quieter space to meet, complete with a screen to show presentations.
If space is a selling point, there is some good news from British Airways, which returns four of its 12 Airbus A380s to the skies in November, serving Los Angeles, Miami and Dubai. Nostalgists will mourn the removal of BA’s Boeing 747s from its fleet during lockdown, but some had cabins very much showing their age.
Sliding door cabins are all the rage and Qatar Airways joined the revolution this summer. New Boeing 787-9s have 30 Business Class Suites in a 1-2-1 herringbone layout that transform into a 79” fully-flat bed. Unlike the previous Qsuite design, all seats face forward and come with handy phone holders with wireless charging.
Lockdown was bad timing for Emirates, which unveiled its long-awaited premium economy concept in December 2020. It is currently taking delivery of the last three A380s ever to be built and with these six of Emirates’ 118 A380s will offer the new cabin.
Emirates has stuck to the standard formula for its design, with 19.5-inch wide seats and “up to” a 40-inch pitch, meaning five to seven inches more legroom. The layout is 2-4-2, giving a spacious feel as it is at the front of the main deck. The cabin, with 56 seats, is offered on some flights from Heathrow and Paris as an upgrade until Emirates has retrofitted enough aircraft to sell it. It’s certain to be a hit, particularly on daytime services.
Despite the pandemic, there is plenty of innovation coming from the world’s top carriers, but sometimes it’s the small things that catch the attention. One idea that may well have legs comes from ANA, which is claiming a world first by fitting hands-free doors on aircraft lavatories. The oversize latch handle allows locking and unlocking with the elbow, reducing the spread of pathogens. It’s a small step, but following the pandemic, one that others will surely follow.