There has been a surge in air travel with this year’s spring break, but a recovery in flights by business travelers is much farther off, according to credit rating agency Moody’s.
“Companies’ duty of care to employees [will restrict] business trips in 2021,” it said in a note Wednesday. “Improving technology, company cost reductions and environmental concerns may put pressure on business travel. Around 10%-30% of business travel could be replaced by alternatives such as virtual meetings. As a result, business travel is unlikely to reach its 2019 level before 2024 at the earliest.”
The note adds that some some forms of less-critical business travel may never fully recover.
The note matches what numerous airline executives have been warning, that despite the pent-up demand for leisure travel, there will be a slow recovery for more lucrative business travel. And that will limit the airlines’ revenue recovery, even if bookings are improving.
The rebound in oil prices this year wasn’t enough to stop credit rating agency Moody’s from downgrading ExxonMobil.
“ExxonMobil’s large increase in debt in 2020 and accompanying deterioration in financial leverage metrics following the onset of the coronavirus pandemic looks unlikely to be fully reversed in the next few years,” said Pete Speer, Moody’s senior vice president in the note that downgraded its rating to Aa2 from Aa1. “The company is prioritizing debt reduction through capital spending restraint and free cash flow generation going forward, but by maintaining its large dividend the progress will be slow and subject to the uncertainties regarding commodity prices.”
ExxonMobil, the nation’s largest oil company, reported its first annual loss for 2020 since its 1999 merger of Exxon and Mobil. It had been one of the few companies with a perfect AAA credit rating until 2016, when it was downgraded for the first time in 67 years.
-Cnn