Air Freight News

Alaska Air CEO says Silicon Valley business travel has dried up

The head of Alaska Airlines says Silicon Valley technology companies have “turned off” their business travel, and it could be as much as another year before they start booking trips again.

“These are the biggest tech companies in the world, and we do have some optimism that they’ll start opening the valve sometime — hopefully in the back half of 2023 or into ’24,” Alaska Air Group Inc. Chief Executive Officer Ben Minicucci said in an interview. 

Major US technology companies have announced job cuts over the past few months as they struggle to reduce costs after expanding during the pandemic. Alphabet Inc.’s Google last week said it would eliminate 12,000 jobs, while International Business Machines Corp. said it would cut 3,900. Inc. announced 18,000 layoffs earlier this month. 

The drought in Big Tech travel — which has hit Alaska harder than other carriers due to its focus on West Coast routes — comes as US corporate travel bookings remain well below pre-pandemic levels. Large corporations generally have returned to about 85% of 2019 travel, even as leisure trips and blended work-personal travel has fueled a rebound in overall bookings. 

Chief Commercial Officer Andrew Harrison said on a conference call Thursday that about one-third of Alaska’s revenue is tied to California and that tech business-related travel has been “severely depressed for some time now.” 

But Alaska is optimistic that Big Tech’s travel budgets can only be cut so far and will eventually rebound sharply.

“These are like the most valuable companies on Earth,” Minicucci said on the same call. “And at some point, they are going to expand again, they’re going to get traveling again.”



© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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