Business travel suffered highs and lows during the recession and will continue to remain super-cyclical. In the medium term though, the outlook is positive. Long-haul premium air travel is returning, however PwC believes the market has fundamentally changed in short-haul travel.
David Trunkfield, partner at PwC, said: “Short haul business flights have taken a much bigger hit during the recession and have not since recovered and at the moment, we don’t see that this segment will ever return to its previous heights.”
A shift in the method of business travel in the future from air to rail, will further impact the short haul business travel segment.
Improvement and growth in high-speed rail networks, the implementation of the European Union Emission Trading Scheme and mandates from corporates will reduce air travel over certain routes, with rail benefiting, PwC believes.
David Trunkfield, partner at PwC, added: “More than three quarters of journeys by PwC people to Paris and Brussels are now by train. This has increased with the introduction of High Speed 1 (HS1) and is likely to increase again when Deutsche Bahn destinations are available through Eurostar.
“This will throw another challenge in the direction of the airlines, as they see improving trends on their long haul networks but further pressure on their short haul ones.”