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While tourism airline travel is set to eventually return to pre-pandemic levels, business travel could become a permanent drag on air travel post COVID, delaying the full recovery of jet fuel demand, and by extension, oil demand.
Aviation fuel demand will not return “to normal” until at least 2023, analysts have said.
But as the summer began in the northern hemisphere, major destinations re-opened, and tourists were eager to board a plane to a sunny destination. This summer, America and Europe have lead a slow but steady recovery in global airline seat capacity and travel, which drove up demand for jet fuel.
But business travel is expected to be the last segment to recover, experts say. Many analysts even believe that corporate travel may never return to the levels seen in 2019, according to surveys and estimates compiled by Bloomberg.
The pandemic and the rise of work-from-home has made a lot of business travel redundant over the past year and a half, adding to the setbacks in jet fuel demand, which has been suffering from travel and border restrictions and quarantine rules.
Once the pandemic is over, many large corporations plan to continue spending less on business travel, a survey by Bloomberg showed. One reason is that technology now makes a lot of business meetings redundant. The other is the growing number of global corporations pledging to reduce their carbon footprint amid the worldwide drive to cut emissions. Cutting on airline travel is one of the key aspects of reducing emissions.
“We don’t think business travel will ever return to 2019 levels,” Will Hawkley, the global head of travel and leisure at KPMG, told Bloomberg.
“Corporates are looking at their bottom-line, their environmental commitments, the demand from employees for more flexible working and thinking: Why do I have to bring that back?” Hawkley added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.