United Airlines generates revenue because travelers mix work and leisure

Such excursions are on the rise as the spread of the ommicron variety has slowed down returns to offices, especially among larger employers. The share of weekend business trips has increased 23 percentage points to 38% since 2019, according to business travel manager TripActions Inc.

United Airlines Holdings Inc. generates a record amount of revenue from the sale of premium seats to leisure customers, Chief Commercial Officer Andrew Nocella said during a conference call on Thursday. The trend “represents a significant amount of potential benefit” to the carrier’s revenue plans, he said.

“Many of our customers who we used to call vacation travelers actually fly for reasons beyond just vacation,” said Robert Isom, president of American Airlines Group Inc. during a conference call Thursday. “They may be traveling to a beach or mountain destination, but they’re actually going to work remotely for a week. The dividing line between leisure and business travel has clearly blurred.”

Get 4 weeks of Crain’s for $1In response to growing demand, TripActions added a dedicated personal travel booking platform in 2020. Last year this was an average growth of 22% per month, said Kelly Soderlund, Senior Director of Communications at TripActions.

A dip in traditional business travel during the pandemic has hurt the profits of airlines that rely on large corporate customers as a major source of profit. Their absence has been felt most deeply on international routes, as well as on major international travel corridors such as New York to Los Angeles. According to industry association Airlines for America, total business travel bookings are 66% below pre-pandemic levels.

But the boom in bleisure – a term not everyone likes — helped make up for some of that lost traffic. American says the mixed trips are often booked last minute and have a higher fare. The airline also saves on marketing costs and has found that people taking such excursions tend to spend more money for a better level of service.

While Big Business remains cautious about work travel, domestic travel by small and medium-sized business employees has risen sharply – and more of that now includes more leisure time.

Bleisure travelers are increasingly flying on Thursdays, alongside business travelers who have traditionally made the biggest travel day of the week. That allows them to work Fridays and go into the weekend earlier, according to Vasu Raja, American’s chief revenue officer.

“As we move through the pandemic, customers have a lot more flexibility with their time,” Raja said.

High-quality journalism doesn’t come for free. Consider subscribing to Crain’s.

Leave a Comment

Your email address will not be published.