Business Travelers Trade Zoom for Airline Tickets

May 16, 2022

As the darkest days of the coronavirus pandemic are being put behind us, more and more companies are reporting business trips, according to Bloomberg.

The fears from many airline carriers that videoconference applications like Zoom and Skype may forever keep corporate leaders at home permanently, are finally subsiding as governments ease border restrictions and mask mandates in the U.S. have officially been lifted.

The European Union announced that it too is relaxing guidance for mask wearing on flights, starting the week of May 16.

The CEO of United Airlines Scott Kirby told Bloomberg reporters that business travel across the Atlantic has already exceeded what the carrier saw in 2019. “That business travel is recovering so rapidly makes us feel really, really confident,” Kirby commented.

Delta Air Lines has seen a similar trend, reporting domestic business bookings have reached 70% of 2019 levels already and that most of its corporate clients expect to travel more in the current quarter.

In may come as no surprise, either, that corporate and business travelers have historically delivered bigger returns for airlines than travelers who fly in coach – spending over $1 trillion in travel in 2019.

So which companies are leading the revival in business travel? According to CWT, a business-travel company that provides services to one-third of S&P 500 members, the recovery is being led by technology, retail and government.

Whether the surge will last, only time will tell. The argument can be made that there’s bound to be some pullback after the initial excitement wears off and executives determine which trips are ultimately worth the travel time or not.

Until then, we remain optimistic on the continued recovery of the airline and travel industry as a whole.

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All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

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Disclosures: Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Because the funds concentrate their investments in specific industries, the funds may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. The funds are non-diversified, meaning they may concentrate more of their assets in a smaller number of issuers than diversified funds. The funds invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. The funds may invest in the securities of smaller-capitalization companies, which may be more volatile than funds that invest in larger, more established companies. The performance of the funds may diverge from that of the index. Because the funds may employ a representative sampling strategy and may also invest in securities that are not included in the index, the funds may experience tracking error to a greater extent than funds that seek to replicate an index. The funds are not actively managed and may be affected by a general decline in market segments related to the index. Airline Companies may be adversely affected by a downturn in economic conditions that can result in decreased demand for air travel and may also be significantly affected by changes in fuel prices, labor relations and insurance costs.

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