Southwest Business sees corporate demand stirring

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While corporate business is "definitely still lagging leisure," Southwest since Labor Day has seen a "nice pickup" in corporate travel.
While corporate business is "definitely still lagging leisure," Southwest since Labor Day has seen a "nice pickup" in corporate travel. Photo Credit: Shutterstock

Although corporate travel levels remain deeply depressed, Southwest Airlines during the past few weeks has started seeing a few encouraging signs, Southwest Business vice president Dave Harvey told BTN.

While corporate business is "definitely still lagging leisure," Southwest since Labor Day has seen a "nice pickup" in corporate travel, Harvey said. Government business represents the most activity, followed by the health care industry and transportation and logistics. Overall, however, absolute corporate bans on business travel are becoming less common.

"There are very few large buyers that have literally no travel," Harvey said. "The hard freezes are being pushed down a bit, and about 90 to 95 percent of our global accounts have some travel this fall."

At the same time, Southwest is seeing some lengthening of booking windows. Since the onset of the Covid-19 pandemic, most bookings have been within one or two weeks of travel, but Southwest has now seen more corporate travelers booking further out, according to Harvey.

Even as corporate travel begins to trickle back in, Southwest still is bracing for a long recovery.

"Absent substantial improvements in our business, our quarterly losses could be in the billions until vaccines are available, distributed and effectively kill the pandemicand at best that is looking like late next year," Southwest chairman and CEO Gary Kelly said in a video message to employees this week. "That's what it will take to drive increased demand for travel."

The carrier aims to avoid furloughs even after the expiration of federal payroll support approved in March. Kelly said he has reduced his own salary to zero, extended executive pay cuts and is cutting pay for noncontract employees. The carrier is negotiating with unions for pay cuts as well, without which furloughs could be necessary as a "last resort," he said. Pay cuts would be reversed if further federal aid for airlines is approved.

Still, Southwest is not pulling back on corporate sales efforts, having added staff to the team back in the spring, Harvey said. This week, the carrier's content went live for bookings on the Amadeus Travel Platform, which is the smallest global distribution system in terms of marketshare in North America but "is absolutely coming up in more of the travel management company and buyer conversations as a strong option, so it was something important to our customers," he said.

With Sabre, however, Southwest still does not "see a path to getting something done in the short term" in terms of enhanced GDS participation, according to Harvey. The "basic booking request" model through which Southwest has worked with Sabre for decades is set to expire at the end of this year, and the carrier is working with TMCs and buyers using the model "to make sure there is no disruption," he said.

Source: Business Travel News

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