Stay ahead of the curve: Top 8 corporate air travel trends to watch in 2024

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Stay Ahead of the Curve: Top 8 Corporate Air Travel Trends to Watch in 2024

By David Frangeul, Senior Director, Global Air & Ground Practices

Navigating corporate air travel has become more complex over the past few years, from combatting rising prices to embracing sustainability and adapting to ongoing new distribution capability (NDC) changes.

In this evolving landscape, it’s critical to understand what’s driving these changes and learn how to adapt your air program accordingly. Here are eight key trends to monitor going into 2024.

1. Changes in corporate contracting

The slow recovery of business travel post-pandemic, coupled with the surge in leisure travel, has prompted airlines to reassess their priorities. Lower discounts, the withdrawal of fixed fares, and a softening of market share targets have become the normal, weakening the value of corporate contracts. Many airlines are beginning to question the value of corporate contracting, given the high demand from leisure travelers who are willing to pay full fare. However, as we look ahead into 2024, there’s potential for a game-changing shift as increased airline capacity and a possible softening of demand could help corporate contracts bounce back.

2. Cost avoidance as a priority to face inflation

Over the past two years, the rapid surge in airfare prices has emerged as a prominent concern in the travel industry. What was once a landscape driven by discount savings and cost-efficiency has begun to evolve. Corporate travel buyers’ negotiating leverage with airlines is at risk and it’s becoming more difficult to secure deals. Now is the perfect time to reassess corporate travel policies and booking behavior to pinpoint areas for other savings opportunities.

3. Disruptions in air distribution

Combatting distribution challenges and navigating the world of NDC are becoming increasingly important. NDC, once a niche concept, has now taken center stage in the corporate travel world. Airline distribution is rapidly evolving with the removal of certain content from the global distribution systems (GDS). As a result, travel buyers need to assess the potential impact these changes have on their air spend and choose the right mix of airlines and booking strategies to match their program needs.

4. Potential value in NDC offering for corporate travelers

Airlines adopting the NDC approach begin by concentrating on basic economy fares, targeting the leisure travel market. However, there might be cases where corporate clients also see potential value in booking these fares. This is where keeping a close eye on NDC fares and comparing them with the fares from GDS becomes crucial. This evaluation process will help determine whether it makes sense for buyers to make the switch to NDC channels.

5. Future NDC development for corporates in 2024

The future of NDC offerings for corporate clients hinges on three significant features: tailoring offers through fare bundling with services, dynamic and ongoing price adjustments, and the introduction of additional price options. We anticipate further advancements in these new products as they are refined and presented to corporate clients in the coming year. However, as new features are released, travel managers must continue to assess whether these changes are adding value to their program before adopting this new retailing model.

6. A growing focus on sustainable airlines

As companies increasingly embrace corporate sustainability objectives, the focus has shifted towards assessing the sustainability of their preferred airlines. Corporate clients are keen to understand just how environmentally responsible their preferred airlines are. As a result, they are seeking comprehensive supplier assessments that encompass a variety of factors including airline fleet efficiency, investments in sustainable aviation fuel (SAF), validation of science-based sustainability targets, meaningful offsetting strategies, and a range of other sustainability initiatives, both on the ground and on board.

7. Sustainable aviation fuel takes off

Sustainable aviation fuel (SAF) has emerged as a promising solution for curbing the carbon emissions associated with the airline industry over the short to medium term. Many major airlines have made headlines by announcing substantial investments in SAF, and they encourage companies to join in supporting these efforts. However, it’s important to note that the current production of SAF meets only a fraction (less than 0.5%) of the industry’s requirements, which raises pertinent questions about the potential and scalability of SAF in fulfilling the sustainability aspirations of the aviation sector.

8. The shift to multimodality

As Europe takes more decisive steps to combat climate change, regulations are becoming increasingly stringent at various levels, including local, national, and European Union-wide directives. With mounting pressure to adopt more sustainable travel practices, business travelers are increasingly exploring eco-friendly alternatives. The extensive high-speed rail network in Europe offers a compelling opportunity to transition travelers from air to rail, aiding in the decarbonization efforts and aligning with sustainability objectives.

One thing is clear – the corporate travel landscape has evolved, and if you aren’t adapting your program to align with today’s needs, you’ll quickly fall behind. Contact us to learn more about how you can keep your air program competitive in 2024.

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