Lufthansa: small businesses will kick-start corporate travel rebound
Small businesses will be eager to swap a year of Zoom calls for in-person meetings.
Lufthansa is optimistic that small- to medium-sized businesses will return to the skies in force as pandemic travel restrictions ease.
Indeed, the German flag-carrier is already seeing increased growth in the SME market as part of its overall corporate travel segment.
“Small and medium companies who will need that positive experience of corporate travel to see their customers, to see their suppliers are making up a bigger share of our corporate customers,” Lufthansa Group CEO Carsten Spohr noted last week following the airline’s Q1 earnings. “That’s the part I’m quite optimistic for.”
Lufthansa and its siblings Austrian Airlines, Brussels Airlines and Swiss rely heavily on business travellers shuttling around Europe, across the Atlantic and into Asia.
And while leisure travel will lead this year’s recovery – spearheaded by the ‘visiting friends and relatives’ as apart from holiday-makers – businesses won't be far behind.
Group Chief Financial Officer Remco Steenbergen expects businesses will be eager to swap Zoom calls for in-person visits, with a spike in business travel demand by the end of 2021 turning into steady growth to reach “at least 90 percent” of pre-COVID corporate travel demand by 2025.
As its own COVID recovery plans gain momentum, Lufthansa plans to repay billions of euros in aid from the German government before the country’s federal election on September 26.
“We were one of the first companies to be saved by the federal government,” Spohr said. “We also want to be one of the first companies to repay the rescue funds.”
Lufthansa also said this week it’s seeking to reduce annual expenses by €3.5 billion through cuts to labor, office and other costs in a bid to bolster earnings as the travel industry begins to emerge from the pandemic.
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