Speaking at United’s first quarter earnings call, CEO Scot Kirby told a story about business travel. His bottom line: United Airlines believes business travel will return quickly and in many markets be even stronger than before the pandemic as early as this fall.
United Airlines CEO: Let Me Tell You A Story About The Return Of Business Travel
Kirby was asked by Jamie Baker of Chase bank when business travel would return. Kirby replied with an anecdote.
I’ll give you one anecdote on business demand, which is, I’ve been talking to one of the CEOs of one of our biggest travel partners, as we’ve gone through the crisis. And I can remember last summer, that CEO telling me that I needed to prepare for business demand to permanently be down by 50%. Because they realized — because Zoom was great and they were — it changed how they were going to interact.
By the time we got into the fall, that same CEO had said, well, we’re going to get back to 100% with our customers, because we realize we have to do that. And we’re losing ground with customers by not being in front of them and losing opportunities. But we’re never going back to all the internal meetings that we used to have. So we’ll be down 20% to 30%.
I talked to that same CEO earlier this year and said, well, as soon as the restrictions are lifted, at least for the first year, we’ve lost some of our cultural connectivity. We’ve had new hires, a lot of new hires coming in, there’s no way they can be a part of our culture sitting at home. So we’re going to probably have to go 20% to 30%, more than we did in 2019.
And I tell that story, because it’s what we have thought at United all the way back to a year ago, which is that, we expected full recovery in business demand because business travel is about relationships. It is not about transactions. It is about relationships and you cannot build human relationships through a medium like this.
This has indeed been United’s position since the pandemic started. Last October, Kirby predicted, “I think demand sort of starts to recover in earnest end of next year, beginning of 2022.” Unless the USA is hit by another wave of the pandemic, his prediction seems to be spot-on.
I’m reminded once again of a pair of commercials from United Airlines about the importance of in-person travel. Humans are social creatures and the Zoom era may never fully go away, but human-to-human interaction is on the rebound.