When will business travel return? Not until 2024, predicts United CEO

"We used to do business with a handshake, face-to-face. Now it's a phone call and a fax, get back to you later with another fax probably. Well folks, some things gotta change," says the boss in a chaotic office scene as he sets out to visit an "old friend who fired us this morning."

Those lines from a 1990 United Airlines commercial are ringing true again amid the coronavirus pandemic, at least for United CEO Scott Kirby. Replace "fax" with "Zoom" and that's the scenario businesses face as they look to begin sending staff back out on the road.

But the return is not expected overnight. Speaking during the Chicago-based carrier's third quarter earnings call on Thursday, Kirby said he does not anticipate air travel to return in earnest until there is a widely available vaccine late next year or in early 2022. Even then, he thinks it will take another two years, or until 2024, for corporate travel to return to normal.

Want more airline-specific news? Sign up for TPG's free new biweekly Aviation newsletter!

The return of business flyers is key to the future health of the airline industry. Holidaygoers and family visits have driven the recovery to date with many taking advantage of cheap fares for their trips. This leisure-first recovery has gotten many planes flying again and has driven some resurgence in the travel industry. But the harbinger of a full recovery will be when the companies that pay top dollar for last-minute plane tickets, book posh hotels and reserve conference rooms get their staff back out on the road.

Even as fears of COVID-19 have eased slightly, many business travelers remain grounded. Or, as United commercial chief Andrew Nocella put it: "People need to be in their offices or around, and that really hasn’t happened yet."

"We’re anxiously watching, for example, the occupancy rate of New York City skyscrapers," he said. "When that number starts to go up, I think you’re going to see business travel start to rebound because there’s a reason to travel.”

Related: United plans ‘aggressive’ competition on transcons when it returns to New York JFK

There are mixed views on when corporate travel will return. On the outside, analysts at Cowen do not expect a return of these lucrative flyers to 2019 levels for five to seven years — or until as late as 2027.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

On the inside, a September survey by analysts at Raymond James found most that most U.S. travelers expect to resume flying for work next year. But those trips are unlikely to be anywhere near the levels seen before the pandemic. Instead, the bank forecasts a "permanent destruction in business travel" in the range of down 10% to 20% from 2019 numbers.

The forecasts fit into United's broader outlook. Corporate travel bans have already been relaxed to allow for some limited travel, noted Nocella. At the same time, Kirby's 2024 date was for a return to "normal" — not when business flyers begin returning in notable numbers, which he expects to start earlier.

Related: United Airlines worries travel recovery will stall until there’s a COVID vaccine

United Schedules to hold steady into 2021

As Kirby put it, the key to United resuming the majority of its schedule will be the wide availability of a coronavirus vaccine. Until then, the airline maintains expectations of flying about half of what it flew in 2019.

The airline plans to hold schedules roughly steady into the new year, Nocella said. Any incremental additions will likely be at United's mid-continent hubs in Denver (DEN) and Houston Bush Intercontinental (IAH) that support connectivity, and not at its coastal gateways in Newark (EWR), San Francisco (SFO) and Washington Dulles (IAD) where local travel remains depressed.

In November, United plans to fly about 44% of what it flew last year across its system. The outlook looks better in the U.S. where flying will be closer to half of 2019 levels.

Related: United Airlines adds new route from Washington Dulles hub, expands schedule in November

Even with schedules in check, United will launch some exciting new routes in 2021. The airline plans to connect Newark with Johannesburg (JNB) and Washington with both Accra, Ghana (ACC), and Lagos, Nigeria (LOS), next spring. These additions follow several new routes to India and Israel.

The carrier remains mum on whether it plans to retire any jets. United has returned more than 150 stored planes to service in recent months, but around 450 remain parked, chief financial officer Gerry Laderman said Thursday.

Cowen analyst Helane Becker has speculated that United could retire its fleet of 54 Boeing 767s as a result of the crisis. The planes could be replaced with new Boeing 787-9s that the airline has in its fleet or on order.

American Airlines has retired its 767s and Delta Air Lines plans to remove its remaining 767-300ERs by 2025.

Related: United Airlines could retire its Boeing 767s due to coronavirus

Airlines at the 'end of the beginning' of COVID crisis

Kirby did not mince words on Thursday. The slow return of flyers and shrinking losses — while all good signs — do not mean the crisis is behind the airline industry.

“The light at the end of the tunnel is a long way away but this is the turning point," he said. He followed that with a quote from former British Prime Minister Winston Churchill's during World War II, that this is only the “end of the beginning."

United's focus is on getting its daily losses to zero as soon as it can. The metric, known as cash burn, averaged $21 million without debt payments in the third quarter. This is a $16 million improvement from an average of $37 million a day without debt during the prior three-month period.

Related: United Airlines: Dept. of Defense study says COVID risk on planes is ‘virtually non-existent’

Cash burn has become the single most important financial metric for airlines and the industry as they aim to turn a profit again. Carriers have racked up billions of dollars in debt to carry them to the other side of the crisis, but they ultimately need return to profitability to pay back those funds.

At current burn rates, Raymond James analysts forecast that United has until April 2022 before it runs out of cash, according to an Oct. 11 report. This is better than American, which has until June 2021 without continued improvement. But it's worse than both Delta and Southwest Airlines, which have until July 2022 and October 2022, respectively.

One item notably absent from United's commentary were comments on the U.S. presidential election on Nov. 3. National election years are historically considered major business concerns for air carriers — something that the pandemic appears to have largely eclipsed.

Related: Mixed messaging on airline relief extends uncertainty for 40,000 furloughed workers