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Demand for business travel to and from the UK has declined by almost a third since before the pandemic, influenced by the rise in home working and growing environmental scrutiny of large corporations.
An analysis by the New Economics Foundation (NEF) revealed that flights for business purposes decreased by 29 per cent in 2023 compared to 2019. This study, which utilised data from the Office for National Statistics (ONS), indicated that approximately 3.9 million fewer business trips were made during this period, as major companies significantly cut back on air travel expenses.
Businesses spent around £2.9 billion less on air travel in 2023 compared to 2019, representing a 22 per cent reduction. The widespread adoption of home working and video conferencing platforms like Zoom and Teams has fundamentally changed how major companies approach business travel.
While leisure travel experienced a robust rebound from the lows of the Covid era last year, the recovery of corporate travel has been less pronounced, causing concern among senior airline executives. The CEO of IAG, the parent company of British Airways, Iberia, and Vueling, warned last summer that business travel volumes had “plateaued,” despite the group achieving record profits driven by resurgent leisure demand.
London City Airport, traditionally the UK’s busiest hub for business travel, reported in April that more than half of its passengers were now leisure travellers for the first time.
Data suggests that corporate travel was on a declining trajectory even before the pandemic. Despite substantial growth in passenger numbers between 2015 and 2019, the market share of business passengers in 2022 was half of what it was a decade earlier.
This decline coincides with increased environmental scrutiny on large corporations, prompting stringent targets for reducing carbon emissions from travel. For example, KPMG UK’s air travel emissions dropped by approximately 80 per cent between 2018 and 2022, and EY has set a goal to reduce air travel carbon emissions by 36 per cent by 2025. In the US, professional services firm Marsh McLennan has announced a greater reliance on virtual meetings.
Alex Chapman, senior economist at the New Economics Foundation, commented: “Business use of air travel peaked in 2007 and has fallen further since the pandemic. Today, growth causes major damage to our climate while benefiting only a tiny group of airport owners and wealthy frequent flyers. The next UK government should take a fresh look at its approach to travel and tourism, and focus on re-invigorating the UK’s neglected domestic tourism economy and coastal areas and the zero-carbon public transport network which will support them.”
As the landscape of business travel continues to evolve, companies and policymakers are urged to consider sustainable alternatives and invest in the domestic tourism sector and public transport infrastructure.
