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Air Canada sees business travel rebound as early as Sept., executive says

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MONTREAL (Reuters) - Air Canada sees higher-margin business travel coming "quite close" to pre-pandemic levels by as early as September, in the latest encouraging sign for the once hard-hit sector, a top executive told Reuters.

Globally, business travel has lagged leisure in bouncing back from a COVID-19-induced slump, but airlines say it is now rebounding in North America as offices reopen and COVID restrictions ease.

Corporate travel is important for airlines because of demand from frequent flyers and appetite for higher-margin premium fares.

Air Canada said earlier this year it expects business travel to reach 40% below 2019 levels by June, and return to 75% to 80% of pre-pandemic levels by 2023.

Canada's largest carrier is seeing a steady recovery in business travel demand although the rebound in the country's overall air traffic has lagged that of the United States.

"We’re actually very encouraged," Air Canada Chief Commercial Officer Lucie Guillemette said in an interview on Tuesday.

"We’re certainly not close to 2019 levels yet, but we are thinking that, based on what we’re seeing, most probably by the time we hit Labor Day, or get into 2023 it should be quite close."

Guillemette also said transborder business travel could especially benefit if the United States were to end COVID testing requirements for arrivals, since those passengers often take shorter trips.

U.S. airlines, along with business and travel groups, have recently pressed the Biden administration to lift a rule requiring nearly all international air passengers with some exceptions to test negative for COVID-19 before entering the country.

"We also believe that some of these restrictions are maybe a little bit more restrictive or difficult for business travelers, a little more so than for leisure travelers," Guillemette said.

"If we look at how the demand recovery patterns behaved as restrictions were lifted, it stands to reason that when this requirement is removed we should see an upside without a doubt.”

(Reporting By Allison Lampert in Montreal; editing by Jonathan Oatis)

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