US Airlines 'Worried' Over COVID-19 Resurgence... "Business Travel Demand Plummets"

Passenger Numbers Expected to Fall Short This Summer
"Airline Industry Growth Effectively Paused"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] As the Delta variant spreads in the United States, corporate business trips are sharply declining again. This has put a brake on the recovery of demand in the airline industry. Earlier, passenger numbers were expected to increase with the anticipation of travel demand recovery starting this summer, but the scale of the increase in users has fallen short of expectations, deepening the concerns of airlines.

The Wall Street Journal (WSJ) reported on the 6th (local time) that "airlines' main source of revenue, corporate business trips, has decreased due to the spread of COVID-19, increasing worries for airlines."

Ed Bastian, CEO of Delta Air Lines, said, "Airline industry growth is virtually at a standstill," adding, "We all know the reason."

He continued, "This summer, corporate business trips within the U.S. remained at 40% of pre-COVID-19 pandemic levels," noting, "This falls short of the initially expected 60% level."

Another U.S.-based airline, Southwest Airlines, also announced that its operating profit in July decreased by about 15-20% compared to pre-COVID-19 levels. The airline had predicted that business trip demand in September would be only about 50% of pre-pandemic levels.

Meanwhile, as there are no signs of the Delta variant calming down, companies are continuously postponing business trips. This has raised concerns that the recovery of demand in the airline industry will be further delayed.

In fact, a recent survey conducted by the American Hotel & Lodging Association targeting 400 potential business travelers found that 60% of respondents said they would postpone business trips.

According to a survey by the Global Business Travel Association (GBTA) targeting general corporations, 21% of respondents have implemented new travel restrictions, and another 25% are considering such restrictions.

However, the airline industry is showing optimism that business trip and travel demand have passed the bottom and will soon rebound.

CEO Bastian emphasized, "It will be different from before COVID-19," but added, "There is absolutely no evidence that business trip demand itself has disappeared."

This content was produced with the assistance of AI translation services.