Management at American Airlines is encouraged by signs that a slow recovery of business travel is occurring after the economic downturn of 2009 forced companies to slash corporate travel budgets.
"In terms of corporate travel, we're seeing signs that business travellers are getting back out on the road," said American chief financial officer Tom Horton during a 20 January earnings call. "In the last two months of the [fourth] quarter, corporate passengers were up versus the prior year."
Horton adds that while corporate revenues were roughly flat year-over-year for November and December of 2009, "that's a pretty big move given that we were seeing corporate revenues down around 35% back in the low points or the dark days in May and June".
He acknowledges the year-over-year comparisons for the last two months of 2009 were easier versus 2008. But Horton also says as the carrier examines comparisons to 2007, "we see a clear positive trend throughout the second half of 2009".
Highlighting that the recovery is different in various regions globally, Horton describes the transatlantic as "kind of emblematic of the international environment".
He believes unit revenues in the sector will continue to improve due to reduced capacity, a recovery in pricing and an overall rise in demand, particularly for premium travel.
"We've also seen that premium demand on peak days of the week is on the upswing and we think that might present some opportunities on the revenue side," says Horton. "It seems that we're seeing some return of the business traveller in the long haul markets and that's where the money is."
Obviously those trends are encouraging for American, but Horton cautions that the carrier's revenue performance is largely determined by the breadth and pace of economic recovery so, "there remains some uncertainty".
Source: Air Transport Intelligence news