The Rise of Business Class Deals Issue 118

View in Browser

We’ve all heard that air travel is—mostly—back. As of early September, passenger numbers are down just 4% from 2019 levels, but one area that hasn’t recovered as well is business travel, which is still down 26% from pre-pandemic levels. And we don’t expect that to change any time soon. If you’re currently thinking, “well, I’m not a business traveler, so this isn’t relevant,” just wait. It’s about to get interesting. Why business travelers matter Business travel is a big deal for airlines. These travelers tend to be more loyal (companies often have corporate contracts with certain airlines), they tend to book with less notice, and, perhaps most importantly, they aren’t as price sensitive since they’re flying on the company dime. Business travelers are the reason airlines tend to charge a ton for last-minute flights, and revenue from business travelers may account for up to 75% of an airline’s revenue (even though they typically only account for 12% of passengers). The rise in business class deals With business travel down, airlines are hurting for revenue, and they want to fill those empty business class seats. As a result, long-haul business class fares are among some of the best values on a per mile basis, with normally $3,000+ business class fares now commonly available in the high-$1,000s roundtrip to Europe out of major hub cities like New York or Washington DC. While deals were less common during summer when prices across the board were high, now that fares are declining again, we’re seeing a lot of great business class deals. A few of the recent roundtrip deals we’ve found for our Elite members include: $1,390 to Japan $1,826 to Portugal $1,922 to Germany $2,933 to South Africa Geography counts The one place where we haven’t seen quite as many great business class deals is flights to Asia. Even with countries like Japan reopening, we're still seeing slow capacity growth—international traffic is still almost 80% down to Northeast Asia from 2019—which drives up fares. But as interest in traveling to Asia resumes enough for capacity to increase, we should start seeing more frequent business class deals to Asia as well. And in the meantime, we’re seeing lots of deals on flights to cities that were once major connecting hubs between the US and Asia that are operating with lots of excess capacity. We routinely send out deals with 130+ departure cities to Europe-adjacent countries like Morocco, Turkey, or the UAE in the $2,000s roundtrip. It's extremely easy to connect onward to popular destinations like Paris or the Maldives from there. So, for example, if you’re hoping to go from Jackson, Wyoming to Athens in a lie-flat seat and can’t find a deal, you might be able to score a great price on a business class seat from Jackson to Istanbul, where you can layover for a day or two before hopping on a budget airline for the 90-minute flight to Athens. The future of business class deals Optimistic projections show that business travel could come roaring back in 2023, even outpacing 2019 levels by up to 10%. However, more pessimistic projections have it continuing to lag by up to 20% from 2019 levels. Realistically, it’ll probably be somewhere in the middle, just under pre-pandemic levels. Does that mean we can expect to see fewer deals on business class next year? We don’t think so. Even as business travel begins to bounce back, it’s probably going to look very different than it once did. Traditional business centers like NYC and the Bay Area might never have the same level of corporate demand and travel patterns that they did before the pandemic. We also expect to see more regional travel. The days when large multinational corporations like Apple spent $150 million with United for flights between San Francisco and Shanghai, as they did back in 2019, just aren’t back. And they may never come back. We expect cash fares in business class to remain relatively low for a long time, at least compared to 2019 figures. And long-haul business class fares might actually remain more competitively priced (on a per mile basis) than business class fares within the US or the Western Hemisphere. The bottom line: If you’ve ever dreamed of flying in the big seats up front, you’ve never had a better chance than now.

SPONSORED: Wi-fi + 7 minutes + a pulse = profit? Beeeeeep! What’s that sound? It’s your portfolio flatlining from an imploding stock market, crypto meltdown, and the worst inflation since Saturday Night Fever. How can you shock it back to life? (Note: this has nothing to do with bell bottoms.) Try an asset that the ultra-wealthy have used to boost their gains for centuries: blue-chip art, which has outpaced the S&P by a whopping 164% over the last 25 years. But wait, don’t you need to be a Studio 54 VIP to invest in Picassos and Warhols? Nope, you just need Masterworks – the 500,00+ user investment platform where you can invest in shares of multi-million dollar art. Since launching, they’ve delivered a groovy 29% average net realized return. Results like those will make you want to start singing “Stayin’ Alive.” Due to record demand, there’s a huge waitlist to join. But, Scott’s Cheap Flights subscribers can completely skip it with this exclusive referral link. See important Reg A disclosures.

Don’t forget! Earlier this month, Transportation Secretary Pete Buttigieg proposed new regulations that would require airlines to give cash refunds if there’s a significant delay and you no longer want to travel, and require airlines to provide non-expiring vouchers for pandemic-related disruptions. The proposed rule is currently in its required 90-day public comment period. You can make your voice heard by leaving a comment.