Main menu

Pages

As business-class ticket prices soar, CFOs face an unpopular choice: economy or bust

featured image

Business class airline seats are becoming more attractive to everyday travelers who want to splurge on flights. As such, companies may need to increase their travel budgets in 2023.

Air France CEO said: luck Feature article. “The summer ‘luxury leisure’ traveler is a complicated matter for the true business traveler,” writes Walt. “As padded seats suddenly became the hottest ticket to travel, businessmen were forced to reroute, reschedule meetings or, frighteningly, fly economy class. .”

“as if hunger game If you need to travel last minute, hurry up,” Henry Harvelt, an industry analyst at Atmosphere Research Group, a global travel market research firm in San Francisco, told Walt. Even if you’re a businessman and don’t care about fares, you couldn’t get a last-minute ticket in business class,” Harteveldt said. “There were no seats available.

Some executives may not want to sit in the middle of the bus between two passengers in exchange for business class benefits. His Dhruv Sharma, a Sydney-based management consultant, told Bloomberg that he couldn’t stretch his budget for his business class, which is the usual option for bringing colleagues to a team gathering in Bangkok. Told. Sharma had to choose economy his ticket. As a result, he offers people to take a vacation when he returns to travel to Thailand. According to Bloomberg, “Yet he expects his 20% of his peers to drop out to become flying coaches.”

Business travel fares in North America are expected to surpass pre-pandemic levels by the end of 2022, according to a report from travel management firm CWT and the Global Business Travel Association (GBTA). In 2022, premium class (business and first class fares) will rise by 45.2% globally. And by 2023, it will increase another 6.2%.

Anything that can strain corporate travel budgets can benefit the airline industry. “After two years of being devastated by a pandemic, the race for the best-priced seats is a huge boost for the industry as a whole,” Walt wrote to her. luck piece.

“Data are lacking on how much business and first class cabin bookings have increased because most airlines keep such details secret,” she wrote. In June, Delta said it came out of a pandemic slump and was “outweighed by a recovery in premium product revenues.” [the] Main cabin for all markets. Like other airlines, Delta makes a profit when passengers redeem their points for frequent flyer miles, and banks and credit card companies pay the airlines and offer benefits. The company announced in June that it made $1.4 billion from American Express in the last quarter. (You can read the full article here.)

CWT and GBTA reports say some companies are responding to rising ticket prices with “smarter, more purposeful travel policies” rather than restricting travel to the cheapest class to cut costs is starting to These companies see business travel as a strategy to achieve higher business goals, not just to meet clients and colleagues in person.

What is your approach to travel and cost savings?


see you tomorrow.

Cheryl Estrada
sheryl.estrada@fortune.com

Upcoming Events: of luck The CFO community Dallas Host an in-depth dinner on the new leadership strategies CFOs must adopt. Click here to attend The Mansion Turtle Creek in Dallas on September 29th. Attendance is free and approval is required. See you soon!

big deal

According to a recent Gallup report, hybrid work—part of the week in the office and part of the week remotely—is quickly becoming the new normal for many employees. One of the key findings is how hybrid workers spend their time onsite and at home. The report found that when in the office, employees prioritize collaborating with colleagues, connecting with their bosses, and using technology that is only available locally. Managers should encourage employees to network with colleagues from different teams and help them manage their time intentionally, Gallup said. In contrast, forcing everyone into the office to participate in Zoom calls and do the independent work they used to do in pajama pants in the living room is not a welcome use of time. Based on a survey of a nationally representative sample of remote workers.

Courtesy of Gallup

deeper

“A $1 million bonus is not enough to stop the exodus of management after the CEO leaves. luck A report by Lila MacLellan found that companies see management turnover as soon as the CEO leaves. “The threat of CEO exit puts additional pressure on corporate boards. We also need to retain many key executives,” wrote MacLellan.The report explains how boards can prepare for potential leadership gaps.

Leader board

Cecilia Jones Jones was appointed CFO of Agios Pharmaceuticals, Inc. (Nasdaq: AGIO), effective September 26. Jonathan Biller was the company’s former CFO and head of corporate affairs, who stepped down to become Vertex Pharmaceuticals’ chief legal officer. Jones joined Agios from LogicBio Therapeutics, where he was CFO. Prior to his role at LogicBio, he worked at Biogen for over 10 years, holding responsible roles within the finance organization. Most recently, he served as Vice President of R&D, Worldwide He Medical, Business Development Finance. Previously, he was a Senior He Director of Corporate Finance. Prior to joining Biogen, Jones served as Genzyme’s Vice President of International Finance.

Stephen Johnston has been appointed CFO of Ideanomics (Nasdaq: IDEX), a global company focused on accelerating the commercial adoption of electric vehicles. Prior to joining Ideanomics, he was CFO of global automotive supplier He Dura Automotive Systems. His experience in finance spans the manufacturing and automotive engineering industries for domestic and global companies such as Tower Automotive and Nexteer Automotive.

heard

“now [baby] Baby boomers spend their days watching cable news, distorting politics, and chasing power. Of course, not all. But for so many, it’s a disappointment to go from “fighting the man” to everything that was hated in the ’60s and ’70s.

— Mark Cuban, billionaire entrepreneur said on Twitter on monday. Cuban continued his recent comments on social media about perception differences between generations.

web version of CFO Daily, a newsletter about the trends and individuals shaping corporate finance. Sign up and get free delivery to your inbox.

Comments