US airlines cheer travel boost from shift to hybrid work

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New York (AFP) – US airlines say they are benefiting from a growing trend of hybrid work, allowing employees to travel more frequently as Covid-19 restrictions ease.

Airlines including American Airlines, United and Delta highlighted the phenomenon in a series of conference calls as they reported notable results on continued strong travel demand.

The growing acceptance of virtual meetings, such as via Zoom, has loosened the ties that once bound office workers to their desks, allowing for greater flexibility.

Trip weekends are getting longer, which means that a trip that used to run from Friday evening to Monday morning may now return on Tuesday or depart on Thursday.

Before the pandemic, United Airlines cut its transatlantic flights midweek. But this winter, more flights to Europe are planned “throughout the week,” said Andrew Nocella, United’s chief commercial officer.

The momentum also means more travel outside of the traditional school holiday season, with Delta highlighting exceptional activity in Florida over the past month.

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“If you look at September, which is historically one of the worst months for Florida, you can’t buy a ticket to Disney,” said Glen Hauenstein, president of the Atlanta-based company.

“They had some people taking breaks here and they said they wanted to go to Disney with their families and couldn’t buy a ticket.”

Some of that non-travel travel may also be the result of deadlines for consumers to use flight credit on canceled Covid-19 travel, said Henry Harteveldt of Atmosphere Research.

“Part of that could be due to the fact that the summer was just too busy and they were priced out by the market or decided they didn’t want to travel,” he added.

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Airlines expect the trend to continue for at least a while. That includes the upcoming holiday season, when traffic is expected to increase throughout the month between Thanksgiving and Christmas.

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Such an expanded travel calendar with less pronounced peaks allows carriers to spread out their work.

“We are hiring our pilot crew for the flights we operate from June 15 to August 15,” Nocella said. “If we can deploy staff for a much longer period of time, it should be incredibly efficient.”

The rebound comes as airlines are still struggling to see a full recovery in lucrative business travel, which has long been a major source of revenue. One downside to the new environment is that some of that revenue may not flow back.

“Many people who used to be frequent travelers have used the time during the pandemic to re-evaluate this part of their lives,” said Harteveldt. “Many no longer want to be street fighters.”

On the other hand, people who travel for work are more likely to choose to extend their stay due to greater acceptance of remote work.

American estimates that 45 percent of its revenue now comes from travelers who combine business and leisure travel, while 30 percent comes from tourism and 25 percent from business travel.

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Airlines are pointing to another boon from this trend: More consumers enrolling in airline rewards programs or purchasing their tickets directly on an airline’s website, said American chief executive Robert Isom.

The latest earnings reports also showed that airlines are still benefiting from increased sales of premium tickets from travelers who have become accustomed to paying more.

“They are willing and able to pay for better comfort, better services and less stress and hassle,” Harteveldt said.

However, analysts are less certain that higher prices will last, especially given the threat of a recession due to elevated inflation.

“It’s definitely difficult to speculate,” said Chris Raite, an analyst at Third Bridge. “We are watching to see if airlines can maintain pricing power in Q4 and 2023.”

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