Virgin Atlantic CEO warns business travel may never recover from pandemic
The boss of airline Virgin Atlantic has said that business travel could see a long-term hit from the coronavirus pandemic which could affect the industry beyond the end of travel restrictions.
Speaking to the FT, Shai Weiss said the carrier is predicting a 20% decline in corporate travel over the next two years in comparison to pre-pandemic levels, adding that he did not think the segment would return in the same form.
“Will business travel return in the same way? No, I don’t think so. But do I think there will be a return to business travel? Absolutely”, Weiss told the FT.
The prospect of a permanent decline in corporate travel, which in some cases can make up over two-thirds of flights, will place many airlines in a difficult position going forward despite a widely expected surge in demand for leisure travel when travel restrictions are eventually eased around the world.
The prospects of a return to pre-pandemic normalcy have also been hindered by the rise of video conferencing technology such as Zoom and Microsoft Teams, which have pushed many businesses to opt to permanently reduce their travel budgets.
However, Weiss added that the airline could find itself cushioned by demand from the premium leisure travel segment, in which Virgin Atlantic has traditionally performed strongly.
“We will maybe have to reduce prices if we are to attract [more people] into premium leisure, but we will. The demand is there,” he said.
The carrier received a £100mln loan from Richard Branson’s Virgin Group in March as the onset of the pandemic last year and the refusal of bailout funds from the UK government forced it to slash costs and secure private funds as its planes were grounded.