The reality is that business travel and the associated upgrades tend to be the airlines “bread and butter”. With tougher economic times and tighter budgets, many business people aren’t travelling quite like they used to. This means that there are less business travellers and most certainly fewer upgrades. This may not be good for the airlines, but it ends up being good for the average consumer.
According to the International Air Transport Association (IATA), there has been a decrease in the number of business travellers and the upgrades that they partake in. This means a huge potential loss to the airlines as it means less occupied seats, and of course less money coming in from upgrades. It is believed that business people aren’t travelling as much as they once did, and that they are travelling differently. Executives aren’t travelling as often, and therefore fewer upgrades are being purchased. This ends up being a loss in demand to the airlines, and therefore an overall loss to them in their potential for profit.
This loss to the airlines ends up resulting in cheaper flights to the average traveller. As the airlines need to fill the seats on their flights, they would much rather offer a discount to get people to fly with them. So not only does this benefit business travellers who are more flexible with their schedules and the way that they travel, but it benefits others as well. The cheaper flights being offered out of necessity by the airlines results in a higher demand by average consumers.
So though the airlines may lose out a bit in terms of profit, they recoup a bit of their cost by filling their seats. It’s better to have full seats at a discount than empty seats, so the airline still recovers a bit. This means that the cheaper flights offered translates to an increase in demand by the average traveller. They want to take advantage of the lower costs to fly, and therefore are more willing to purchase airline tickets. So though the loss of business travellers and upgrades are a hit to the airlines, this is a big win to the average traveller who just wants to get away on a cheaper flight.