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Airlines in Crisis: Just 27% Planning Business Travel, Yet Such Trips Account for Almost Half of Revenues

  • Business travel prior to the pandemic responsible for 45% of Lufthansa’s revenues
  • All signs point to fewer business trips in the future, even long after the pandemic
  • DAX executives believe that less business travel results in a better quality of life, more efficiency and lower costs.
  • Air traffic in Germany down by up to 77% during pandemic 
  • Demand for airline shares currently significantly lower than a year ago 

A mere 27% of Germans are planning business trips this year. While private travel is much more common, airlines’ past profits have depended on high volumes of business travellers. In a new infographic, Block-Builders.net explores significant new developments concerning air travel and the airline industry.

There is much to suggest that the Corona crisis has changed travel for good. Many corporate executives, including the heads of DAX companies, have expressed that they do not miss flying frequently at all. This development is a potential threat to airlines.

Before the Corona crisis, business travel accounted for about 45% of Lufthansa’s revenues, as shown in the infographic.

Air traffic at major German airports contracted sharply in the face of the pandemic. In Munich, traffic was 77% lower in 2020 than in the previous year, while in Frankfurt the decline was 73%. Fraport CEO Schulte is not hopeful of a quick V-shaped recovery. Quite the contrary: he doesn’t expect business travel to return to pre-crisis levels until 2026.

At least as far as Lufthansa shares are concerned, demand had initially remained strong. Around a year ago, the Google search volume for these securities stood at a high of 100. This value, an indicator of relative search volume, now stands at 30. Despite these developments, Lufthansa’s market capitalisation has risen by 20.9% over the past year. Competitor Ryanair actually managed to increase its market capitalisation by 61.1%.

“There is much to suggest that the pandemic has changed travel habits forever,” explains Block-Builders analyst Raphael Lulay. “This is especially true for business trips, which will be much less frequent in the future.” 

Written by Tenner Smith

Tenner Smith - I have experience in financial intelligence and automated intelligence. In industry I have worked on artificial intelligence and machine learning. Tenner Smith is a reporter at DF media.

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