Business travel is on a steady ascent, aligning with the resurgence observed in the leisure travel sector over the past three years.
On Thursday (April 25), American Airlines announced a record first-quarter (Q1) revenue of approximately $12.6 billion, with business travel showing robust growth, particularly among small- to medium-sized businesses.
United Airlines similarly reported a double-digit percentage increase in business demand quarter over quarter last week, underscoring strong corporate travel demand both domestically and internationally.
American Airlines CEO Robert Isom highlighted this positive trend during a call with analysts and investors, noting “sequential improvement in the recovery of managed corporate travel and domestic business revenue growth,” outpacing capacity growth in the first quarter.
This surge in business travel aligns with the strong performance of American Airlines’ loyalty and travel rewards program. In the first quarter of 2024, new loyalty member accounts surged by 60% compared to the same period in 2019, indicating a promising trajectory for the airline.
Underpinning this growth is American Airlines’ strategic investment in technology, particularly in enhancing digital servicing capabilities. The airline now boasts the capability to sell and digitally service approximately 95% of transactions, company executives said, significantly streamlining the customer experience.
Furthermore, the company reported a significant increase in bookings facilitated by modern distribution technology, rising from 51% to 81% between Q1 2019 and Q1 2024.
“Engaging directly with our customers through modern internet-based technology is where the industry is headed, and we’re leading the way,” Isom remarked.
In another significant development, American is set to debut its Preferred Agency Program, slated to kick off on July 11. This program, enabled by the New Distribution Capability (NDC), is part of the airline’s efforts to enhance digital selling and servicing experiences for travelers.
Agencies meeting the NDC threshold, including the use of Modern Retailing technology, are eligible to qualify for the program, which then enables travelers booking via approved agencies to continue earning AAdvantage miles and Loyalty Points.
“The vast majority of our agencies are currently in an NDC transition, and even bigger agencies are signing on for it because they realize the customer utility [of having] a digital selling and servicing experience,” Isom remarked.
The airline’s commitment to modernizing travel experiences mirrors a broader industry-wide push toward digital transformation. United Airlines, for instance, has integrated generative artificial intelligence (GenAI) into its online platform to expedite customer search and improve flight status notifications.
Meanwhile, British Airways has unveiled a 7 billion pound ($8.9 billion) transformation plan, leveraging advanced technologies to enhance the customer experience and optimize operational efficiency. Central to this initiative is the integration of AI and machine learning to facilitate punctual flight departures, ensuring smoother journeys for passengers.
Beyond digital enhancements, collaborations such as the initiative between KLM Royal Dutch Airlines, Amsterdam Airport Schiphol and global identity technologies provider IDEMIA demonstrate a commitment to leveraging innovative technologies, such as Digital Travel Credential and facial recognition, to streamline border control processes and enhance traveler convenience.
“Upon arrival at Schiphol Airport, participants pass through a special DTC ‘Tap & Go’ border gate,” a post on the Government of Netherlands website explained. “Participants then hold their passports against the border gate. If there is a match between the DTC and the offered passport and no peculiarities have emerged from previous checks, the participants can cross the border.”
