Airlines Compete for Business Travelers Amid Industry Shifts

DALLAS, Texas – Airlines are intensifying efforts to attract and retain business travelers, who account for a disproportionate share of revenue despite making up only 12% of passengers. Business travelers are typically twice as profitable as leisure passengers, contributing up to 75% of earnings on certain flights, according to industry data.

American Airlines, among others, has implemented new strategies to cater to corporate clients. The airline recently relaunched its Corporate Experience program, offering priority seating and rebooking options for flight delays. CEO Robert Isom reported that business travel revenue has recovered to 7% below pre-pandemic levels as of the third quarter.

Southwest Airlines has also entered the fray, upgrading its booking process with dedicated portals for business travelers. Meanwhile, American Express Global Business Travel highlighted challenges in the New Distribution Channel rollout, which initially disrupted traditional booking methods preferred by many corporate clients.

Despite these efforts, the industry faces headwinds. Business travel recovery lags behind leisure travel, with experts citing technological, environmental, and cultural shifts as contributing factors. Bain & Company research suggests that even a 10%-15% decline in business travel could significantly impact major carriers.

To combat this, airlines are focusing on fleet upgrades, schedule optimization, and enhanced loyalty programs. American Airlines, for instance, allows travelers to accumulate loyalty points for eligible business expenses, including flights, upgrades, and hotels. The airline has also partnered with Citibank to offer additional benefits through its AAdvantage® program.

However, competition remains fierce. Low-cost carriers like Southwest are increasingly targeting business travelers, while traditional airlines work to rebuild relationships with corporate clients and travel agencies. The industry’s future profitability may hinge on its ability to adapt to these evolving dynamics.