The corona-virus pandemic impacted the corporate and leisure sectors of the travel industry really strong. Even the impact of 9/11 cannot compare to what the air travel industry was up against.
The rapid decline in air travel affected not only the airlines, but corporate and leisure travel agencies. Corporate travel is more sustainable in terms of prearranged agreements between corporate clients and travel agencies. However, the economic shutdown caused corporations to promptly revise their travel policies and to suspend all business travel in the name of their employees’ health.
Agencies face thousands of dollars refunds of unused tickets or exchanges. Many airlines prohibit the refunds to be issued by travel agencies. This option stays reserved by the airlines alone. However, they delay processing the credits resulting in additional financial challenges in the corporate travel world and unhappy customers eager to be reimbursed for the unused travel as soon as possible.
Furthermore, travel agencies are almost unable to charge agency service fees for these involuntary changes; such changes made them work practically for free as this service is usually subject to a fee.
The fact that major carriers like Avianca and LATAM filed for bankruptcy in May, puts more strain on the already complicated travel market. The impact of bankruptcies is even bigger on low-cost airlines worldwide.
With the relief of the lockdown measures and the opening the of the economies the travel industry slowly and cautiously takes steps to return back to normal. New standards for air travel are being set, and the industry and its customers have no choice but to adjust.
The ability of many employees to work from home during the shelter-in-place steered the corporate travel to a new direction; companies are revising their travel policies looking to provide services remotely which previously required travel. It results in reducing their travel expenses and opens the possibility of outsourcing some positions to cost-effective locations.
Adjusting to the new “normal” and thoughtfully looking into the future one thing is for sure – the air travel we know is no more.
Coauthor: Dessi Ivanova, travel professional with more than 20 years experience in the travel industry.