Jetting off at a moment’s notice to visit clients was second nature for many investment bankers before the pandemic struck. After more than a year of lockdowns and remote working, plenty of executives are now saying the days of regular globe trotting are gone for good.
There “will definitely be much less travelling,” Nordea Bank Apb Chief Executive Officer Frank Vang-Jensen said Thursday, while Standard Chartered Plc’s finance boss Andy Halford told Bloomberg Television he expects travel costs to reduce sharply: “We see a step change down in the level of travel once we normalise out of this.”
Earlier this week, HSBC Holdings Plc Chief Financial Officer Ewen Stevenson said his bank was budgeting for travel costs to fall by half, with greater reliance on “video technology and having people go on fewer, longer trips when they do travel.”
The changes — once unthinkable — are the latest adjustments to office life staples now the pandemic has proved the case for remote working. Banks are shrinking their real estate footprints as outfits including Deutsche Bank AG and UBS Group AG say they are open to making flexible working the norm, although some Wall Street firms have been more skeptical of the shift. Goldman Sachs Group Inc. CEO David Solomon has said work-from-home is an “aberration.”
Cutting back on flights could mean big savings, as well as environmental kudos.
HSBC has said travel costs were down $300 million in 2020, suggesting an annual saving of $150 million going forward if behavioral changes stick. JPMorgan Chase & Co. spent about $800 million on global travel and expenses in 2019, according to a Business Travel News ranking.
A fall in that revenue spells trouble for airlines, which count business passengers as their most lucrative market. The route between London’s Heathrow and New York’s JFK airports generated about $1.2 billion in revenue for British Airways alone in the year through March 2019, according to estimates by data company OAG.
Still, Airbus SE CEO Guillaume Faury said on Thursday in a Bloomberg TV interview that he expects business travel to come back eventually, though it will lag behind the recovery for other parts of the market such as leisure and family trips.
Some bankers agree. JPMorgan CEO Jamie Dimon said in November he doesn’t think business travel will slip as much as expected because firms may see a competitive advantage in visiting clients in person.
“If I’m the gung-ho person, I want to get the business, taking that trip may be much different than saying I’ll meet you in a Zoom,” Dimon said. “I think people like me will travel as much and Zoom more.”